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Business Address12300 GRANT STREETTHORNTON CO 80241(720) 872-5000

Mailing Address12300 GRANT STREETTHORNTON CO 80241

SECURITIES AND EXCHANGE COMMISSION

FORM 10-KAnnual report pursuant to section 13 and 15(d)

Filing Date: 2012-03-22 | Period of Report: 2011-12-31SEC Accession No. 0001350102-12-000032

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FILERAscent Solar Technologies, Inc.CIK:1350102| IRS No.: 203672603 | State of Incorp.:DE | Fiscal Year End: 1231Type: 10-K | Act: 34 | File No.: 001-32919 | Film No.: 12709415SIC: 3674 Semiconductors & related devices

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UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549_____________________________________________________

FORM 10-K_____________________________________________________

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to

Commission File No. 001-32919 __________________________________________________________

Ascent Solar Technologies, Inc.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of

incorporation or organization)

20-3672603(I.R.S. Employer

Identification No.)

12300 Grant Street, Thornton, CO(Address of principal executive offices)

80241(Zip Code)

Registrant’s telephone number, including area code: 720-872-5000Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which Registered

Common Stock, $0.0001 par value per shareClass B Warrants

The NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act:None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the ExchangeAct. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during thepreceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein,and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by referencein Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smallerreporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 ofthe Exchange Act.



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Large accelerated filer o Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of June 30, 2011, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate marketvalue of the registrant’s common stock held by non-affiliates was approximately $23.1 million based upon the last reported sale price ofthe registrant’s common stock on that date as reported by NASDAQ.

As of March 15, 2012, there were 40,957,854 shares of the Company’s common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCEPart III incorporates certain information by reference from the registrant’s definitive proxy statement for the 2012 annual meeting

of stockholders, which will be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2011.



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ASCENT SOLAR TECHNOLOGIES, INC.Form 10-K Annual Report

for the Fiscal Year ended December 31, 2011TABLE OF CONTENTS

Page

PART I 1Item 1. Business 1Item 1A. Risk Factors 8Item 1B. Unresolved Staff Comments 19Item 2. Properties 19Item 3. Legal Proceedings 19Item 4. Mine Safety Disclosures 20PART II 20Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities 20Item 6. Selected Financial Data 21Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22Item 7A. Quantitative and Qualitative Disclosures About Market Risk 30Item 8. Financial Statements and Supplementary Data 31Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 31Item 9A. Controls and Procedures 31Item 9B. Other Information 32PART III 32Item 10. Directors, Executive Officers and Corporate Governance 32Item 11. Executive Compensation 32Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters 32Item 13. Certain Relationships and Related Transactions, and Director Independence 32Item 14. Principal Accounting Fees and Services 32PART IV 32Item 15. Exhibits, Financial Statement Schedules 32

Signatures 34



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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes “forward-looking statements” that involve risks and uncertainties. Forward-lookingstatements include statements concerning our plans, objectives, goals, strategies, future events, future net sales or performance, capitalexpenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historicalinformation and, in particular, appear under headings including “Management’s Discussion and Analysis of Financial Condition andResults of Operations” and “Business.” When used in this Annual Report, the words “estimates,” “expects,” “anticipates,” “projects,”“plans,” “intends,” “believes,” “forecasts,” “foresees,” “likely,” “may,” “should,” “goal,” “target” and variations of such words orsimilar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon informationavailable to us on the date of this Annual Report.

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control,that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among otherthings, the matters discussed in this Annual Report in the sections captioned “Risk Factors” and “Management’s Discussion andAnalysis of Financial Condition and Results of Operations.” Factors you should consider that could cause these differences are:

• Our limited operating history and lack of profitability;

• Our ability to secure equity or debt or other financing necessary to fund our operations and the acquisition of additionaloperating capacity;

• Our ability to meet our cost and performance metrics and to implement the production capacity that we have forecasted;

• Our ability to develop demand for, and sales of, our photovoltaic modules and establish strategic relationships with keydistribution partners, including original equipment manufacturers, system integrators and distributors;

• Our ability to develop, internally and with partners, applications for our photovoltaic modules;

• Our ability to obtain necessary or desired certifications for our photovoltaic modules;

• The extent to which we are able to reduce the per watt manufacturing costs of our photovoltaic modules, and the extent towhich our competitors are able to do the same with their photovoltaic modules;

• Our ability to qualify and effectively operate production tools pursuant to our business plan and within budgeted amounts;

• Our competitive position and that of our photovoltaic modules relative to others in the photovoltaic and thin-film markets;

• Our continued investment in research and development, and our ability to remain competitive through improvement of ourexisting technology and development of new technologies;

• The extent to which we are able to manage the expansion of our operations effectively, both domestically and abroad, whetherdirectly owned or indirectly through licenses;

• The supply, availability and price of equipment, components and raw materials, including the elements needed to produce ourphotovoltaic modules;

• Global demand for electricity and the market for renewable energy, including solar energy;

• The cost-effectiveness of photovoltaic-generated energy relative not only to that generated from conventional sources such asfossil fuels, but also to that generated from other renewable sources which include wind, biomass, geothermal and tidal power;

• The availability of, or changes to, government policies, subsidies and incentives that affect the use or cost of renewable energy;

• The emergence of disruptive or competing technologies in the energy industry;

• The extent to which our interests align with or deviate from that of TFG Radiant Investment Group Ltd. and itsaffiliates (“TFG Radiant”) and Norsk Hydro Produksjon AS (“Norsk Hydro”), our largest stockholders, and their



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affiliates;

• Our ability to expand and protect the intellectual property portfolio that relates to our photovoltaic modules and processes;

• The extent to which we qualify to perform research and development under the federal government’s Small BusinessInnovation Research program;

• Our ability to attract and retain key executives and employees;

• The continual good standing of our license from ITN Energy Systems, Inc.;

• The commencement or outcome of legal proceedings against us or by us, including proceedings relating to environmentalmatters or intellectual property rights;

• Foreign currency exchange fluctuations, political instability in certain foreign markets or the general state of geopoliticalaffairs; and

• General economic and business conditions, and in particular, conditions specific to the solar power industry.

There may be other factors that could cause our actual results to differ materially from the results referred to in the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events orcircumstances after the date made or to reflect the occurrence of unanticipated events, except as required by law.

References to “we,” “us,” “our,” “Ascent,” “Ascent Solar” or the “Company” in this Annual Report mean Ascent SolarTechnologies, Inc.



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PART I

Item 1. Business

Business Overview

We are a development stage company formed in October 2005 to commercialize flexible photovoltaic (“PV”) modules usingproprietary technology. Our technology was initially developed at ITN Energy Systems, Inc. (“ITN”) beginning in 1994 andsubsequently assigned and licensed to us. Our proprietary manufacturing process deposits multiple layers of materials, including a thinfilm of highly efficient copper-indium-gallium-diselenide (“CIGS”) semiconductor material, on a flexible, lightweight, plastic substrateand then laser patterns the layers to create interconnected PV cells, or PV modules, in a process known as monolithic integration. Webelieve that our technology and manufacturing process, which results in a lighter, flexible module package, provides us with a uniquemarket opportunity relative to both the crystalline silicon (“c-Si”) based PV manufacturers that currently lead the PV market, as well asother thin-film PV manufacturers that use substrate materials such as glass, stainless steel or other metals that can be heavier and morerigid than plastics.

Currently, we are in limited production based on our ability to create demand within the emerging and specialty markets. Productsin these markets carry higher average selling prices as compared to commodity markets. We continue to qualify our equipment and wehave adjusted our utilization of equipment based on our near term forecast. In the near term we intend to focus on emerging andspecialty markets with higher average selling prices, shifting our focus to rooftop applications in the longer term. Under our currentbusiness plan, we expect losses to continue until annual production reaches approximately 30 MW or more. We intend to augment ourown manufacturing capabilities by licensing our proprietary manufacturing processes to others. Although we plan to continuemanufacturing at our current facilities, our plans are also to have significant future production capacity enabled through partnerships,joint ventures or other commercial or licensing arrangements. To date, we have financed our operations primarily through public andprivate equity financings.

We believe that there remains strong interest in renewable energy in general and solar in particular, but existing global politicaland financial conditions are significantly disrupting key solar markets. Throughout 2011, there was a reduction in the then-current andexpected average selling prices for PV modules. This was a result of many factors, most significantly the increased industry-widemanufacturing capacity, which has contributed to excess industry channel inventories, and a concurrent scaling back of governmentsubsidies and incentives related to solar energy.

We believe that our lightweight flexible technology is transformational in nature, and will provide us advantages in serving thebuilding applied photovoltaic (“BAPV”) and building integrated photovoltaic (“BIPV”) markets, which we expect will be our largesttarget markets, as well as specialty markets like defense, portable power, transportation, off grid and distributed power.

We believe that our use of CIGS on a flexible, durable, lightweight, high-tech plastic substrate will allow for unique and seamlessintegration of our PV modules into a variety of electronic products, building materials, defense, transportation and space applications, aswell as other products and applications that may emerge. We believe that the unique attributes of our materials and manufacturingprocess will enable a reduction in the overall system and installation cost-per-watt ratios. For markets that place a high premium onweight, such as rooftop, defense, space and near-space markets, we believe our materials should provide attractive increases in power-to-weight ratio, and we believe that our materials have higher power-to-area ratios and voltage-to-area ratios than competing flexible PVthin-film technologies. These metrics will be critical as we position ourselves to compete in commercial rooftop applications and highvalue-added markets like defense, transportation, space and other solar module applications where weight and seamless or elegantintegration are key considerations.

Product History

While focused on speed to market, we believe that quality and consistency of product will be paramount to our success in themarketplace. Our progression also takes into account market conditions, as well as financing options. In keeping with our philosophy,we completed construction of our initial production line in December 2007. In March 2008, we demonstrated initial operating capacity(“IOC”) of that production line by initiating production trials as an end-to-end integrated process. Early IOC production trials resulted inaverage thin-film device efficiencies of 9.5% and small area monolithically integrated module efficiencies of over 7.0%. During 2008optimization trials resulted in thin-film device efficiencies in the 9.5% to 11.5% range and corresponding module efficiencies in the7.0% to 9.0% range. The test modules measured approximately 15 centimeters wide by 30 centimeters long.



During the first quarter of 2009, we began limited production of monolithically integrated flexible CIGS modules in our initialproduction line and continued to provide sample modules to potential customers and development partners to explore

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integration of our products into new applications. In June 2009, we announced the fabrication of a five meter long CIGS module, whichwe believe is the largest flexible CIGS module consisting of integrated components ever produced on polyimide and possibly the largestCIGS module ever produced regardless of construction. Based on internal test and evaluation, this five meter long module weighedapproximately two kilograms and produced 123 watts (under standard test conditions) with an aperture area efficiency of 9.1%.

In July 2009, we obtained independent verification by the U.S. Department of Energy’s National Renewable Energy Laboratory(“NREL”) that our modules measured 10.4% in conversion efficiency. The modules tested at NREL were approximately 15 centimeterswide by 30 centimeters long. In October 2009, NREL verified our achievement of a manufacturing milestone of 14.0% cell efficiency.We also announced a peak efficiency of 11.7% for CIGS modules. In December 2010, we achieved 12.1% module efficiency on thesame form factor. In August 2009, we completed internal qualification testing of a flexible packaging solution which successfullypassed the rigorous standard of one thousand (1,000) hours of damp heat testing (85% relative humidity and 85° C temperature)guideline set forth by International Electrotechnical Commission (“IEC”) 61646 standards for performance and long term reliability ofthin-film solar modules. In February 2010, three of our product configurations were certified by an independent laboratory on a varietyof U.S. Department of Defense (“DOD”) rugged standards known as MIL-STD-810G. In October 2010, we completed full externalcertification under IEC 61646 at an independent laboratory of a two meter module. Achieving this certification is required for BIPV andBAPV applications used in commercial, industrial and residential rooftop markets. Certification activities will continue as required aswe introduce new products and make changes or improvements to our already certified products.

In June 2010, we announced that the Defense Advanced Research Projects Agency (“DARPA”) selected us for an award under theLow-Cost Lightweight Portable Photovoltaics (“PoP”) solicitation. The program we led entitled “Flexible High-performance Tandem-junction PV Array”, consists of three gated phases that extend over 54 months. In late 2011, we were informed by DARPA that budgetconstraints may prevent progression to the second and third phases of this project. The goal of PoP is to demonstrate low-cost,lightweight PV that can stand up to battle conditions and environmental extremes while delivering a power conversion efficiency of20% or greater by the end of the program.

Throughout 2011, we worked with dozens of customers in prototyping and developing applications for our products. In the thirdquarter of 2011, we were awarded a patent: "Machine and Process for Sequential Multi-Sublayer Deposition of Copper Indium GalliumDiselenide Compound Semiconductors" (US 8,021,905). In addition, we filed four new patent applications during 2011.

Commercialization and Manufacturing Expansion Plan

We intend to be the first company to commercialize the manufacture of large, roll-format, PV modules that use CIGS on a flexible,plastic substrate. Our manufacturing expansion plan entails the qualification, testing and operation of our production tools to increaseour production. We also intend to develop joint ventures and license our technology. During the year ended December 31, 2011, we hadproduct sales of approximately $538,000, which we do not consider sufficient for exiting development stage.

Substantially all equipment necessary for production has been delivered as of December 31, 2011. Our 2011 production volumeswere based primarily on market demand for our products in emerging and specialty markets. In March 2011, based on marketconditions, we revised our near-term strategy to focus on applications for emerging and specialty markets, including off-grid, militaryand defense and consumer oriented products, which we believe will better leverage the unique characteristics of our product and carryhigher average selling prices. Our long-term strategy is focused on these markets and the BIPV/BAPV markets.

During 2010, we applied for funding under the U.S. Department of Energy (“DOE”) Loan Guarantee Program for an additionalproduction facility with a nameplate capacity of 150 MW per year. On February 23, 2011, the DOE informed us that our submission wasselected for due diligence review by the DOE. For a number of strategic and financial reasons, in April 2011, we informed the DOE thatwe were withdrawing our submission from further consideration under the program.

We analyze long-lived assets for impairment, both individually and as a group, whenever events or changes in circumstancesindicate that the carrying amount of the assets may not be recoverable. Due to recent significant adverse changes in market conditions,particularly the decreases in current and expected average selling prices for PV modules, we concluded during the second quarter of2011 that the carrying value of Property, Plant and Equipment may not be recoverable. This analysis utilized projected selling prices andoperating costs under alternative scenarios to arrive at total estimated cash flows. As a result of this analysis, we recorded an impairmentloss of $78.0 million in the carrying value of Property, Plant and Equipment and Deposits on manufacturing equipment in the quarterended June 30, 2011. The impairment loss was measured as the amount by which the carrying amount of the underlying assets exceededfair value, as calculated using the expected present value technique. Actual cash flows may differ from the forecasts used in the analysis.This analysis incorporated many

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different assumptions and estimates which involve a high degree of judgment. These assumptions and estimates, which may changesignificantly in the future, have a substantial impact on the actual impairment loss recorded.

The manufacture of photovoltaic modules is a capital-intensive business. Our unique technology enables the manufacture ofdifferentiated PV products with high power density which are lightweight and flexible. We believe markets of substantial size will existlong term, requiring significant additional production capacity. We also believe that over time significant production volumes will berequired to achieve appropriate product costs.

We plan to continue the development of our current PV technology to increase module efficiency, improve our manufacturingtooling and process capabilities and reduce manufacturing costs. We also plan to continue to take advantage of research anddevelopment contracts to fund a portion of this development.

We intend to augment our own manufacturing, product development and distribution capabilities by licensing our proprietarytechnology and manufacturing processes to others. We plan to continue manufacturing at our current facilities; however, our plans are tohave significant future production capacity enabled through partnerships, joint ventures or other commercial or licensing arrangements.We expect such arrangements would transform our business model to one that is primarily focused on development of technologies. Weplan to enable partners to commercialize such technologies in exchange for license fees, consulting revenues, non-recurring engineeringfees, royalties, milestone payments, and other similar arrangements. We plan to select our partners based on their capabilities in volumemanufacturing, application development, marketing, distribution, sales and service for the relevant technologies and markets.

Consistent with this change in strategy, on August 12, 2011, we completed a strategic alliance with TFG Radiant. As part of thisstrategic alliance, TFG Radiant acquired 6,400,000 shares of our common stock at a price of $1.15 per share or $7,360,000 in theaggregate. The closing price of our common stock on August 12, 2011 was $0.73. In addition, TFG Radiant received an option toacquire an additional 9,500,000 shares of our common stock at an exercise price of $1.55 per share. The option was approved by ourshareholders on October 27, 2011. TFG Radiant may not exercise this option unless and until TFG Radiant meets a specified milestoneassociated with the construction of the first East Asia FAB. This option expires on February 12, 2014. In addition, in exchange for thegrant by us of exclusive rights to manufacture and sell solar devices based on our proprietary CIGS PV technology in East Asia(comprised of China, Taiwan, Hong Kong, Thailand, Malaysia, Indonesia, Korea and Singapore), TFG Radiant has committed to invest$165 million to build an initial FAB in East Asia using our proprietary processes for manufacturing flexible CIGS PV, will provideconsulting fees to us in connection with installation and commissioning of any FABs in East Asia, will provide license fees, royaltypayments, and ownership interest in all East Asia FABs, and, subject to the East Asia FABs meeting certain milestones related toproduction and costs, will provide incentive payments to us of up to $250 million over time.

On January 4, 2012, we announced that TFG Radiant had agreed to purchase 8,067,390 shares of our common stock presentlyowned by Norsk Hydro for $4 million, or approximately $0.50 per share. The TFG Radiant purchase is expected to close prior to March31, 2012. Upon closing of the purchase, TFG Radiant's ownership would increase to approximately 39% of our outstanding commonstock.

On February 1, 2012, we announced the appointment of Victor Lee as President and Chief Executive Officer. Mr. Lee has servedon our Board since November 2011. Mr. Lee is the managing director of Tertius Financial Group Pte Ltd, the joint venture partner withRadiant Group in TFG Radiant. As President and Chief Executive Officer, Mr. Lee will not receive any cash, equity or othercompensation.

We are evaluating the timing of further expansion based on many factors that include demand, market conditions, productcertification, availability of financing, technical advances, strategic partnerships and/or joint ventures and other factors.

Advantages of CIGS on a Flexible Plastic Substrate

Thin-film PV solutions differ based on the type of semiconductor material chosen to act as a sunlight absorbing layer, and also onthe type of substrate on which the sunlight absorbing layer is affixed. We believe that we are the only company currently focused oncommercial scale production of PV modules using CIGS on a flexible, plastic substrate with monolithic integration. We utilize CIGS asa semiconductor material because, at the laboratory level, it has a higher demonstrated cell conversion efficiency than amorphous silicon(“a-Si”) and cadmium telluride (“CdTe”). We also believe that CIGS offers other compelling advantages over both a-Si and CdTe,including:

• CIGS versus a-Si: Although a-Si, like CIGS, can be deposited on a flexible substrate, its conversion efficiency, which alreadyis generally much lower than that of CIGS, measurably degrades when it is exposed to ultraviolet light, including naturalsunlight. To mitigate such degradation, manufacturers of a-Si solar cells are required to implement measures that add cost andcomplexity to their manufacturing processes.



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• CIGS versus CdTe: Although CdTe modules have achieved conversion efficiencies that are generally comparable to CIGS inproduction, we believe that CdTe has never been successfully applied to a flexible substrate on a commercial scale. We believethat the use of CdTe on a rigid, transparent substrate, such as glass, makes CdTe unsuitable for a number of the applicationsthat we are targeting in the BIPV/BAPV and other markets. We also believe that CIGS can achieve higher conversionefficiencies than CdTe in production.

Our choice of substrate material further differentiates us from other thin-film PV manufacturers. We believe that the use of aflexible, lightweight, insulating substrate that is easier to install provides clear advantages for commercial rooftops, higher value-addedBIPV/BAPV markets, and other markets where rigid substrates are unsuitable in many associated applications. We also believe that ouruse of a flexible, plastic substrate provides us significant cost advantages because it enables us to employ monolithic integrationtechniques on larger components that we believe are unavailable to manufacturers who use flexible, metal substrates. Accordingly, weare able to significantly reduce part count, thereby reducing the need for costly back-end assembly of inter-cell connections. As the onlycompany, to our knowledge, focused on the commercial production of PV modules using CIGS on a flexible, plastic substrate withmonolithic integration, we believe we have the opportunity to address the BIPV/BAPV, defense, transportation, off grid, portable power,aerial and other markets with transformational high quality, value-added product applications.

Competitive Strengths

We believe we possess a number of competitive strengths that provide us with an advantage over our competitors.

• We are an early mover in CIGS technology with a proprietary, flexible, lightweight, high efficiency PV thin-film productthat positions us to penetrate a wide range of attractive high value-added markets such as BIPV/BAPV, defense,transportation, off grid, portable power, aerial and other markets. By applying CIGS to a flexible plastic substrate, we havedeveloped a PV module that is efficient, lightweight and flexible, providing unique opportunities for integration into buildingmaterial products, such as roofing membranes, shingles, siding and facades, metal and composite panels. Commercial rooftopsalone are a major segment of the world solar market. The market for electronic components, such as electronic packages,casings, and accessories as well as defense portable power systems, transportation integrated applications and space and near-space solar power application solutions, also may prove to be a significant premium market. Relative to our thin-filmcompetitors, we believe that our early mover advantage in thin-film CIGS on plastic technology provides us with a superiorproduct offering for these strategic market segments.

• We have the ability to manufacture PV modules for different markets and for customized applications without altering ourproduction processes. Our ability to produce PV modules in customized shapes and sizes, or in a variety of shapes and sizessimultaneously, without interrupting our production flow provides us with flexibility in addressing target markets and productapplications, and allows us to respond quickly to changing market conditions. Many of our competitors are limited by theirtechnology and/or their manufacturing processes to a more restricted set of product opportunities.

• Our integrated, roll-to-roll manufacturing process and proprietary monolithic integration techniques provide us a potentialcost advantage over our competitors. Historically, manufacturers have formed PV modules by manufacturing individual solarcells and then interconnecting them. Our large format, roll-to-roll manufacturing process allows for integrated production. Inaddition, our proprietary monolithic integration techniques allow us to utilize laser patterning to create interconnects, therebycreating PV modules at the same time we create PV cells. In so doing, we are able to reduce or eliminate an entire back endprocessing step, saving time as well as labor and manufacturing costs relative to our competitors.

• Our strategic relationship with TFG Radiant provides us with direct access to a potentially large customer base in the EastAsia market. TFG Radiant is a joint venture of Radiant Group, a Chinese conglomerate in construction and real estate, andTertius Financial Group, a private investment firm based in Singapore. The Radiant Group, with more than 3,000 personnel,operates various businesses across China, Indonesia, Singapore and Malaysia, including metal roofing and facades, import/export trading, real estate investment, project management and consultation, new-energy development, manufacturing anddistribution and gold mining.

• Our proven research and development capabilities position us to continue the development of next-generation PV modulesand technologies. Our ability to produce CIGS-based PV modules on a flexible plastic substrate is the result of a concertedresearch and development effort that began more than seventeen years ago. We continue to pursue research and development inan effort to drive efficiency improvements in our current PV modules and to work toward next-generation technologies andadditional applications.

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• Our manufacturing process can be differentiated into two distinct functions, a front end module manufacturing process anda back end packaging process. Our ability to produce finished un-packaged rolls of CIGS material for shipment worldwide tocustomers for encapsulation and integration into various products enhances our ability to work with partners internationally.

Markets and Marketing Strategy

Our modules can be directly incorporated into standard building and roofing materials, commercial transportation, automotivesolutions, space applications, consumer electronics for portable power and durable off-grid solutions. Our marketing and distributionstrategy is based on the formation of strategic relationships with key partners, including original equipment manufacturers (“OEMs”),system integrators, resellers and distributors. Our goal is to leverage our unique, transformational technology to enable powergeneration from a wide variety of applications within these markets.

The BIPV and BAPV markets represent a sizable opportunity for our products, as they could allow system providers to realizesignificant advantages over traditional PV systems. BIPV partners could benefit by integrating solar modules directly into building andconstruction materials at the time of manufacture or on-site by an integrator, thus reducing overall balance-of-system (“BOS”) andinstallation costs. Potential solutions in this market include building products such as roofing membranes, shingles, siding, facades,shading devices, fabric structures and metal and composite panels. In BAPV applications, our lightweight solar modules can be attachedto surfaces of existing structures without penetrating the roof surface or adding significant weight.

The defense market has a unique set of requirements that we feel are well suited to our products. When integrated with fabric toform re-deployable arrays, our highly efficient, rugged, lightweight modules may allow soldiers to minimize battery loads, reduce theuse of conventional fuels, and increase safety through the streamlining of fuel transport operations. Our modules can also provide areliable source of renewable power in remote areas, regardless of local infrastructure. We intend to reach the market primarily throughpartnerships with top systems providers in the defense market while simultaneously qualifying our products through the rigorousmilitary testing process.

Transportation integrated PV, or integration of our flexible solar modules with vehicles such as commercial trucks, buses, trainsand passenger cars, is another market segment that represents a significant opportunity. Due to their flexible form and durable,lightweight properties, our modules could be fitted to the exterior of various vehicles to provide supplemental power withoutsignificantly affecting the aerodynamics, weight and aesthetics of the vehicle. We are currently working with multiple integrators andOEMs to develop effective value-added solutions for this market.

The overall increase in usage of portable electronic devices coupled with large populations in emerging markets has created a needfor portable, rugged sources of renewable energy. We have responded to this market development by creating small, portable, flexiblesolar modules in various output voltages to target both large and small scale energy requirements. Our modules can be integrated with awide variety of existing devices to create new sources of renewable energy, or used as stand-alone chargers. We are currently workingwith multiple partners to develop innovative portable power solutions for both developed and emerging markets worldwide.

In addition to the markets mentioned above, an opportunity may exist for the integration of space and near-space vehicles withflexible solar modules. Customers in this market have historically required a high level of durability and conversion efficiency fromsolar module suppliers, and we believe that our products are aligned to compete in this premium market. We expect opportunities in thissegment to develop gradually due to customers' extensive development, testing and evaluation processes.

We continue to supply our strategic partners with PV modules to support our partners’ development, testing and certification ofnew integrated PV products, including product testing by several branches of the U.S. military. We believe that our high power density,high quality flexible solar modules enable new applications for solar power. By creating mutually beneficial partnerships andstrategically penetrating the markets discussed above, we plan to transform the landscape of solar power generation with trulyinnovative end products.

Manufacturing Strategy

We manufacture our products by affixing a thin CIGS layer to a flexible, plastic substrate, and we use proprietary monolithicintegration techniques that enable us to form complete PV modules with less or no costly back end assembly of inter-cell connections.Traditional PV manufacturers assemble PV modules by bonding or soldering discrete PV cells together. This manufacturing steptypically increases manufacturing costs and at times proves detrimental to the overall yield and reliability of the finished product. Byreducing or eliminating this added step using our proprietary monolithic integration techniques, we believe that we can achieve costsavings in, and increase the reliability of, our PV modules. We also use a large



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format, roll-to-roll manufacturing process that permits us to fabricate our flexible PV modules in an integrated sequential operation.

During the first quarter of 2009, we began limited production of monolithically integrated flexible CIGS modules. In mid-2010,we began production of monolithically integrated flexible CIGS modules at our production plant in Thornton, Colorado.

The timing and amount of our production capacity and actual output will depend on a number of technical factors such as moduleefficiency, production yield and throughput. Our projections of annual rated production capacity have been and continue to be based onassumptions about these and other factors and we periodically revisit and revise these assumptions to account for realized rates andmeasurements on our production lines. Future production yield and throughput will depend on our continuing efforts to successfullyramp up the production equipment.

Substantially all tools ordered have been delivered to our production facility in Thornton, Colorado. We are continuing the processof qualifying certain production tools. The output of our production facility in 2012 will depend on product demand, market conditions,technical factors, and the final qualification of tools. We intend to continue to optimize our manufacturing processes includingthroughput, efficiency and yield to improve product performance and reduce manufacturing costs. We also intend to identify andevaluate suitable locations for new production lines for future expansion, domestically and abroad, that we believe will best serve ourtarget markets and customers for future expansion.

Competition

The landscape of thin-film manufacturers encompasses a broad mix of technology platforms at various stages of development, andconsists of a number of medium and small companies. Energy Conversion Devices, Inc. ("Energy Conversion") manufactures thin-filma-Si cells on flexible metal foil. These cells must be individually assembled in series and in parallel to form an integrated module similarto how c-Si products are manufactured. Companies currently developing or selling CIGS-based PV modules include Avancis GmbH &Co. KG, DayStar Technologies, Inc., Flisom AG, Global Solar Energy, Inc., HelioVolt Corporation, MiaSolé, Nanosolar, Inc., Nuvosun,Inc., Odersun AG, Q-Cells SE, Solibro GmbH, Solarion AG, Solar Frontier, SoloPower, Inc., Stion and Würth Solar GmbH & Co. Anumber of manufacturers that traditionally have manufactured and sold c-Si-based modules have entered, or in the future may enter, themarket for thin-film PV modules, and potentially, CIGS-based PV modules. These efforts have been initiated both through internaldevelopment and the acquisition of external companies or the purchase of turnkey solutions offered by PV equipment providers.

The market for traditional, grid connected PV products is dominated by large manufacturers of c-Si technology. In 2010, the fivelargest of these manufacturers included: Suntech Power Holdings Co., Ltd. (China), JA Solar Holdings Co., Ltd. (China), Yingli GreenEnergy Holding Co. Ltd. (China), Trina Solar (China), and Motech Solar (Taiwan). We anticipate that while these leaders may continueto dominate the market with their silicon-based products, thin-film manufacturers will begin to capture an increasingly larger share ofthe market. In 2010, crystalline silicon PV technology represented approximately 86% of global market share, with the balance capturedby thin-film.

We believe that our modules offer unique advantages. Their flexible form factor and high power density enable use on weightconstrained or architecturally complex rooftops that may be unsuitable for glass-based modules. Product design agility and customer-focused development both yield modules that could be integrated into virtually any product to create a source of renewable energy.Whether compared to glass-based or flexible modules, our products offer competitive advantages making them unique in comparison tocompeting products.

Research and Development and Intellectual Property

We intend to continue to invest in research and development in order to provide near-term improvements to our manufacturingprocess and products, as well as to identify next-generation technologies relevant to both our existing and potential new markets. During2011, 2010 and 2009 we incurred approximately $24.1 million, $24.4 million and $15.5 million, respectively, in research anddevelopment costs.

Our technology was initially developed at ITN beginning in 1994. In early 2006, ITN assigned to us certain CIGS PV-specifictechnologies, and granted to us a perpetual, exclusive, royalty-free, worldwide license to use these technologies in connection with themanufacture, development, marketing and commercialization of CIGS PV to produce solar power. In addition, certain of ITN’s existingand future proprietary process and control technologies, although non-specific to CIGS PV, were assigned to us. ITN retained the rightto conduct research and development activities in connection with PV materials, and we agreed to grant a license back to ITN ofimprovements to the licensed technologies and intellectual property that are outside of the CIGS PV field.

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We protect our intellectual property through a combination of trade secrets and patent protections. We own the following patentsand published patent applications:

1. “Apparatus and Method of Production of Thin-Film Photovoltaic Modules” (US Patent No. 7,271,333) (issued September 18,2007)

2. “Flexible Photovoltaic Array With Integrated Wiring And Control Circuitry, And Associated Methods” (US PatentNo. 7,812,247) (issued October 12, 2010) (co-owned with PermaCity Corporation)

3. “Machine and Process for Sequential Multi-Sublayer Deposition of Copper Indium Gallium Diselenide CompoundSemiconductors” (US Patent No. 8,021,905) (issued September 20, 2011)

4. “Flexible High-Voltage Adaptable Current Photovoltaic Modules and Associated Methods” (US 11/877,632) (filed October 23,2007) (co-owned with PermaCity Corporation)

5. "Flexible Photovoltaic Array with Integrated Wiring and Control Circuitry, and Associated Methods" (12/901,963) (filedOctober 11, 2010) (co-owned with PermaCity Corporation)

6.“Array of Monolithically Integrated ThinFilm Photovoltaic Cells and Associated Methods” (US 12/143,713) (filed June 20,2008)

7.“Hybrid Multi-Junction Photovoltaic Cells and Associated Methods” (12/174,626) (filed July 16, 2008)

In addition, we have seven unpublished pending patent applications in related areas, four of which were filed in 2011.

Suppliers

We rely on several unaffiliated companies to supply certain raw materials used during the fabrication of our PV modules. Weacquire these materials on a purchase order basis and do not have long term contracts with the suppliers, although we may enter intosuch contracts in the future. We currently acquire all of our high temperature plastic from one supplier, although alternative suppliers ofsimilar materials exist. We purchase component molybdenum, copper, indium, gallium, selenium and indium tin oxides from a varietyof suppliers. We also currently are in the process of identifying and negotiating arrangements with alternative suppliers of materials inthe United States and Asia.

The manufacturing equipment and tools used in our production process have been purchased from various suppliers in Europe, theUnited States and Asia. Although we have had good relations with our existing equipment and tools suppliers, we intend to monitor andexplore opportunities for developing alternative sources to drive our manufacturing costs down.

Employees

As of December 31, 2011, we had 77 full time employees.

Company History

We were formed in October 2005 from the separation by ITN of its Advanced Photovoltaic Division and all of that division’s keypersonnel and core technologies. ITN, a private company incorporated in 1994, is an incubator dedicated to the development of thin-film, PV, battery, fuel cell and nano technologies. Through its work on research and development contracts for private and governmententities, ITN developed proprietary processing and manufacturing know-how applicable to PV products generally, and to CIGS PVproducts in particular. Our company was established by ITN to commercialize its investment in CIGS PV technologies. In January2006, ITN assigned to us all its CIGS PV technologies and trade secrets and granted to us a perpetual, exclusive, royalty-free worldwidelicense to use certain of ITN’s proprietary process, control and design technologies in the production of CIGS PV modules. Uponreceipt of the necessary government approvals in January 2007, ITN assigned government funded research and development contractsto us and also transferred the key personnel working on the contracts to us. Today, ITN provides us with a very limited amount oftechnical services. Dr. Mohan Misra, former Chairman of our Board of Directors and formerly our Chief Strategy Officer, has acontrolling interest in ITN.

Corporate Information



We were incorporated under the laws of Delaware in October 2005. Our principal business office is located at 12300 Grant Street,Thornton, Colorado 80241, and our telephone number is (720) 872-5000. Our website address is www.ascentsolar.com. Informationcontained on our website or any other website does not constitute, and should not be considered, part of this Annual Report.

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Available Information

We file with the Securities and Exchange Commission (“SEC”) our annual report on Form 10-K, quarterly reports on Form 10-Q,current reports on Form 8-K and all amendments to those reports, proxy statements and registration statements. You may read and copyany material we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may alsoobtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SECmaintains an internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regardingissuers, including us, that file electronically. We make available free of charge on or through our website at www.ascentsolar.com ourannual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed orfurnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) as soon asreasonably practicable after we file these materials with the SEC.

Item 1A. Risk Factors

The risks included here are not exhaustive or exclusive. Other sections of this Annual Report may include additional factors which couldadversely affect our business, results of operations and financial performance. We operate in a very competitive and rapidly changingenvironment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can itassess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actualresults to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors shouldnot place undue reliance on forward-looking statements as a prediction of actual results.

Risks Relating to Our Business

We have a limited history of operations, have not generated significant revenue from operations and have had limitedproduction of our PV modules.

We have a limited operating history and have generated limited revenue from operations. Currently we are in limited productionutilizing a combination of equipment from our production lines. Under our current business plan, we expect losses to continue untilannual production reaches approximately 30 MW or more. We plan to continue manufacturing at our current facilities; however, ourplans are to have significant future production capacity enabled through partnerships, joint ventures or other commercial or licensingarrangements. Our ability to achieve our business, commercialization and expansion objectives will depend on a number of factors,including whether:

• we successfully augment our manufacturing capabilities by licensing our proprietary manufacturing processes to others;

• we successfully ramp up commercial production on the equipment installed and to be installed in our own production lines;

• our products are successfully and timely certified for use in our target markets;

• we successfully qualify production tools to achieve the efficiencies, throughput and yield necessary to reach our cost targets aswe expand our rated production capacity;

• the cost models on which we intend to rely for the manufacture of our PV modules prove accurate;

• our strategic alliance with TFG Radiant results in the manufacture and sale of sufficient products based on our proprietarytechnology;

• we raise sufficient capital to expand our total rated capacity to a level that will enable us to reach the economies of scale webelieve necessary to achieve profitability;

• we receive timely delivery of production tools from our equipment suppliers;

• we effectively manage the planned expansion of our operations; and

• we successfully develop and maintain strategic relationships with key partners, including OEMs, system integrators anddistributors, who deal directly with end-users in our target markets.

Each of these factors is critical to our success, and accomplishing each of these tasks may take longer or cost more than expected, ormay never be accomplished. It also is likely that problems that we cannot now anticipate will arise. If we cannot



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overcome these problems, our business, results of operations and financial condition could be materially and adversely affected.

We have to date incurred net losses and may be unable to generate sufficient sales in the future to become profitable.

We incurred a net loss of $105.7 million for the year ended December 31, 2011 and reported an accumulated deficit of $183.0 million asof December 31, 2011. We expect to incur net losses for the foreseeable future. Our ability to achieve profitability depends on a numberof factors, including the growth rate of the solar energy industry, market acceptance of thin-film and other PV modules, thecompetitiveness of our PV modules and our ability to increase production volumes. If we are unable to generate sufficient revenue toachieve profitability and positive cash flows, we might be unable to satisfy our commitments and may have to discontinue operations.

Our business is based on a new and unproven technology, and if our PV modules or processes fail to achieve the performanceand cost metrics that we expect, then we may be unable to develop demand for our PV modules and generate sufficient revenueto support our operations.

Our CIGS on flexible plastic substrate technology is a new and unproven technology in commercial scale production. Our business planand strategies assume that we will be able to achieve certain milestones and metrics in terms of throughput, uniformity of cellefficiencies, yield, encapsulation, packaging, cost and other production parameters. We cannot assure you that our technology will proveto be commercially viable in accordance with our plan and strategies. Further, we or our strategic partners and licensees may experienceoperational problems with such technology after its commercial introduction that could delay or defeat the ability of such technology togenerate revenue or operating profits. If we are unable to achieve our targets on time and within our planned budget, then we may not beable to develop adequate demand for our PV modules, and our business, results of operations and financial condition could bematerially and adversely affected.

Our failure to further refine our technology and develop and introduce improved PV products could render our PV modulesuncompetitive or obsolete and reduce our net sales and market share.

Our success requires that we invest significant financial resources in research and development to keep pace with technologicaladvances in the solar energy industry. However, research and development activities are inherently uncertain, and we could encounterpractical difficulties in commercializing our research results. Our expenditures on research and development may not be sufficient toproduce the desired technological advances, or they may not produce corresponding benefits. Our PV modules may be renderedobsolete by the technological advances of our competitors, which could harm our results of operations and adversely impact our netsales and market share.

Failure to expand our manufacturing capacity successfully at our facilities or through strategic alliances would adversely impactour ability to sell PV modules into our target markets and would materially and adversely affect our business, results ofoperations and financial condition.

Our growth plan calls for the installation and operation of additional production tools at our facilities and to have significant futureproduction capacity enabled through partnerships, joint ventures or other commercial or licensing arrangements. The successfulcompletion and operation of future production tools will require substantial engineering resources and is subject to significant risks,including risks of cost overruns and delays, risks that we may not be able to successfully acquire, install, combine or operate theequipment needed, or the possibility that one or more of the production tools may never be qualified or become operational.Furthermore, we may never be able to operate our production processes in high volume or at the volumes projected, make plannedprocess and equipment improvements, attain projected manufacturing yields or desired annual capacity, obtain timely delivery ofproduction tools, obtain on reasonable terms adequate facilities in which to install the production tools, or hire and train the additionalemployees and management needed to operate and maintain the production tools. In addition, our strategic alliances may not result infuture production capacity in the amounts we anticipate or at all. Failure to meet these objectives on time and within our planned budgetcould materially and adversely affect our business, results of operations and financial condition.

We may be unable to manage the expansion of our operations and strategic alliances effectively.

We will need to significantly expand our operations and form beneficial strategic alliances in order to reduce the incrementalmanufacturing costs of our PV modules through economies of scale and partnerships, secure contracts of commercially materialamounts with reputable customers and capture a meaningful share of our target markets. To manage the rapid expansion of ouroperations and alliances, we will be required to improve our operational and financial systems, oversight, procedures and controls andexpand, train and manage our growing employee base. Our management team will also be required to maintain and cultivate ourrelationships with partners, customers, suppliers and other third parties and attract new partners, customers and suppliers. In addition,our current and planned operations, personnel, facility size and configuration, systems and



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internal procedures and controls, even when augmented through strategic alliances, might be inadequate or insufficient to support ourfuture growth. If we cannot manage our growth effectively, we may be unable to take advantage of market opportunities, execute ourbusiness strategies or respond to competitive pressures, resulting in a material and adverse effect to our business, results of operationsand financial condition.

Failure to receive timely delivery of production tools from our equipment suppliers could delay our planned expansion ofmanufacturing capacity and materially and adversely affect our results of operations and financial condition.

Although a significant amount of our production tools have been delivered, our planned expansion of our own manufacturing capacitydepends on the timely delivery of production tools from our equipment suppliers and our good working relations with those suppliers.We cannot be certain that the equipment orders we place with these suppliers will be fulfilled as we expect or in a timely manner, or thatwe can preserve good working relationships, especially as we adjust delivery of outstanding orders. If delivery of the remainingproduction tools is not made on schedule or at all, then we might be unable to carry out our own manufacturing expansion plans,produce PV modules in the volumes and at the times that we expect or generate sufficient revenue from operations, and our business,results of operations and financial condition could be materially and adversely affected. In addition, certain process steps in ourmanufacturing process have machinery that is currently purchased from a single vendor. If we are unable to purchase certain equipmentfrom a single source vendor, our operations or our expansion plans could be negatively affected.

Plans for an additional production facility to be built pursuant to our Joint Development Agreement with TFG Radiant contemplate theincorporation of additional advances in equipment design. If the planned changes to this equipment are not achievable by the equipmentsuppliers or take longer to implement than planned, timing for the additional production facility could be delayed or may not occur atall.

We depend on a limited number of third party suppliers for key raw materials, and their failure to perform could causemanufacturing delays and impair our ability to deliver PV modules to customers in the required quality and quantity and at aprice that is profitable to us.

Our failure to obtain raw materials and components that meet our quality, quantity and cost requirements in a timely manner couldinterrupt or impair our ability to manufacture our PV modules or increase our manufacturing cost. Most of our key raw materials areeither sole-sourced or sourced by a limited number of third party suppliers. As a result, the failure of any of our suppliers to performcould disrupt our supply chain and impair our operations. Many of our suppliers are small companies that may be unable to supply ourincreasing demand for raw materials as we implement our planned expansion. We may be unable to identify new suppliers in a timelymanner or on commercially reasonable terms. Raw materials from new suppliers may also be less suited for our technology and yieldPV modules with lower conversion efficiencies, higher failure rates and higher rates of degradation than PV modules manufactured withthe raw materials from our current suppliers.

Our planned capacity expansion and continuing operations will likely require additional capital which we may not be able toobtain on favorable terms, if at all or without dilution to our stockholders.

Our planned capacity expansion and continuing operations will likely require additional capital. We currently are unable to determinewhat forms of financing, if any, will be available to us. If we raise additional funds through the issuance of equity or convertible debtsecurities, the percentage ownership of our existing stockholders could be significantly diluted, and these newly issued securities mayhave rights, preferences or privileges senior to those of existing stockholders. If we raise additional funds through debt financing, whichmay involve restrictive covenants, our ability to operate our business may be restricted. We cannot assure you that additional financingwill be available on terms favorable to us, or at all. If adequate funds are not available or are not available on acceptable terms, if andwhen needed, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our products, expandcapacity or otherwise respond to competitive pressures could be significantly limited, and our business, results of operations andfinancial condition could be materially and adversely affected.

In addition, the terms of a loan we obtained from the Colorado Housing and Finance Authority (“CHFA”) in connection with ourpurchase and improvement of our Thornton, Colorado facility contain covenants that limit our ability, without the consent of CHFA, tocreate or incur additional indebtedness (other than obligations created or incurred in the ordinary course of business); merge orconsolidate with any other entity; or make loans or advances to our officers, shareholders, directors or employees. The presence of thesenegative covenants gives CHFA the ability to bar us from engaging in certain transactions in the future that we may determine arenecessary or advisable to meet our business objectives, including debt offerings and acquisitions of or by other companies. If CHFAwere to withhold its written consent under these or other circumstances, we could be forced to prepay such loans at a premium, whichcould adversely affect our business, results of operations and financial condition.



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Future sales or the potential for future sales of our securities may cause the trading price of our common stock to decline andcould impair our ability to raise capital.

Sales of a substantial number of shares of our common stock or other securities in the public markets, or the perception that these salesmay occur, could cause the market price of our common stock or other securities to decline and could materially impair our ability toraise capital through the sale of additional securities. A large number of our outstanding shares are not registered under the SecuritiesAct of 1933, as amended. If and when these shares are registered or become eligible for sale to the public market, the market price ofour common stock could decline.

We currently have certified a limited number of BIPV/BAPV PV modules and have recorded limited sales of such products;further, we expect that significant PV module sales will not occur for some time.

In 2010, an independent laboratory certified a certain one of our prototype products under the IEC 61646 standards. The successfulconclusion of this testing established the viability of a flexible packaging solution that will endure over a long period of time. CertainBIPV/BAPV applications require certification as a prerequisite to sales of the product. We are in the process of obtaining certificationswhere required on our products and product families. Delays or obstacles in achieving these certifications could negatively impact ourrevenue or profitability. In addition, as we develop new products and product families, new certifications will be required. Delays inobtaining these certifications could have a negative impact on our financial results. Because we have not yet achieved large scalecommercial production and because we believe additional PV modules will need to be certified in order for them to be commerciallyviable for sales into the BIPV/BAPV markets, we do not expect to record major BIPV/BAPV module sales for some time. We expectthat it will be some time before we can determine whether our expectations relating to our products and their acceptance into BIPV/BAPV markets are confirmed. Further, because we will be required to invest substantial resources in pursuing our target markets inadvance of any major revenue stream that may result from such investments, an unanticipated or longer than expected delay of revenueramp-up could put a strain on our resources, adversely affecting our business, results of operations and financial condition, and couldrequire us to seek additional capital.

If we are unable to find technologically satisfactory and economically viable packaging solutions for our products for use intarget applications or markets, our business and results of operations may be materially and adversely affected.

In order to be used for a particular application or in a particular market, our PV modules must be packaged in a way that satisfies theenvironmental and usage demands or certification requirements of the application or market. For example, the BIPV/BAPV markettypically requires certain independent certifications, and a demonstration that the product can survive designated adverse weather andother environmental conditions for an anticipated lifecycle of twenty to twenty-five years. We have several types of packaging that arein various states of testing, but until such time as cost-effective and technologically satisfactory solutions have been demonstrated over aperiod of time, our sales and revenue into those affected markets may be materially limited or negatively affected.

Our PV modules may never gain sufficient market acceptance, in which case we would be unable to sell our PV modules orachieve profitability.

Demand for our PV modules may never develop sufficiently, and our PV modules may never gain market acceptance, if we fail toproduce PV modules that compare favorably against competing products on the basis of cost, quality, weight, efficiency andperformance. Demand for our PV modules also will depend on our ability to develop and maintain successful relationships with keypartners, including OEMs, system integrators, value-added resellers and distributors. If our PV modules fail to gain market acceptanceas quickly as we envision or at all, our business, results of operations and financial condition could be materially and adversely affected.

We are targeting emerging markets for a significant portion of our planned product sales. These markets are new and may notdevelop as rapidly as we expect, or may not develop at all.

Our target markets include BIPV/BAPV, defense and portable power, transportation, and space and near-space. Although certain areasof the BIPV/BAPV market have started to develop, we believe this market, as well as the markets for portable power, and transportationare in their infancy. We believe these markets have significant long term potential, however, some or all of these markets may notdevelop and emerge as we expect. If the markets do develop as expected, there may be other PV products that could provide a superiorproduct or a comparable product at lower prices than our products. If these markets do not develop as we expect, or if competitors arebetter able to capitalize on these markets our revenues and product margins may be negatively affected.

Large scale BIPV/BAPV may require third party financing. Third party financing often requires certain “bankability”standards for the PV supplier. We may be unable to meet these standards.

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Banks and other entities providing financing for solar energy projects endeavor to reduce risk on these projects by evaluating solarproduct quality, completion likelihood, power purchaser credit worthiness, project model quality, and environmental factors. Solarpanels are typically the highest cost and most important components of the project cost. For most financing models, the solar modulesmust have strong power output for 20 years or longer. Companies providing traditional solar modules, or companies with a longer trackrecord with their products may be deemed the lowest risk, whereas, thin-film products, with the exception of First Solar’s product, maybe deemed higher risk due to product immaturity. In some cases, third party insurance indemnification can be used to address this risk.Our limited operating history, the newness of our products, or our financial strength may not be as strong as our potential competitors,which may reduce the likelihood of project finance support from banks for projects involving our products resulting in our inability tosell our products into certain solar installations, which would negatively affect our revenue and profitability.

Failure to consummate strategic relationships with key partners in our various target market segments, such as portable powerapplications for defense and governmental agencies or space and near-space high value-added solar applications markets as wellas the BIPV/BAPV and transportation markets, and the respective implementations of the right strategic partnerships to enterthese various specified markets, could adversely affect our projected sales, growth and revenues.

We intend to sell thin-film PV modules for use in BIPV/BAPV, defense and portable power systems, transportation, and space and near-space solar panel applications. Our marketing and distribution strategy is to form strategic relationships with distributors and value-added resellers to provide a foothold in these target markets. If we are unable to successfully establish working relationships with suchmarket participants or if, due to cost, technical or other factors, our PV modules prove unsuitable for use in such applications; ourprojected revenues and operating results could be adversely affected. Further, to the extent that we are able to establish strategicrelationships with key partners and distributors, those relationships may be on a non-exclusive basis (for example, our strategicrelationship with TFG Radiant and Norsk Hydro are non-exclusive), which means that our partners are not obligated to use us as theirsole source of PV modules, and may instead choose to use the products of our competitors. Any such reduction in demand for our PVmodules may have a material adverse effect on our revenues, results of operations and financial condition.

If sufficient demand for PV solutions does not develop or takes longer to develop than we anticipate, we may be unable to growour business, generate sufficient revenue to attain profitability or continue operations.

The solar energy industry is at a relatively early stage of development, and the extent to which PV modules, including our own, will bewidely adopted is uncertain. If PV technology proves unsuitable for widespread adoption or if demand for PV modules fails to developsufficiently, we may be unable to grow our business, generate sufficient sales to attain profitability or continue operations. Many factors,many of which are outside of our control, may affect the viability of widespread adoption of PV technology and demand for PVmodules, including:

• the cost effectiveness of PV modules and installed PV systems relative to other renewable energy sources, such as wind,geothermal, tidal power and other PV technologies;

• the cost effectiveness of PV modules and installed PV systems relative to conventional carbon based and other energy sources,such as coal, oil, natural gas and nuclear, and whether the levelized cost of PV can approach that of these conventional energysources;

• whether PV-generated power reaches grid parity in the geographic markets where our products will be used;

• the availability and amount of government subsidies and incentives to support development of the solar energy industry;

• the deregulation of the electric power industry and the broader energy industry;

• the emergence of other disruptive technologies in the energy industry;

• the ease with which PV solutions can penetrate and adapt to existing energy industry infrastructure;

• the availability of raw materials used in the manufacture of PV products; and

• availability of capital to fund development of technology in the solar energy market.

We face intense competition from manufacturers of c-Si-based PV modules, other manufacturers of thin-film PV modules andother companies in the solar energy industry.

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The solar energy and renewable energy industries are both highly competitive and continually evolving as participants strive todistinguish themselves within their markets and compete with the larger electric power industry. We believe that our main sources ofcompetition are c-Si PV manufacturers, other thin-film PV manufacturers and companies developing other solar solutions, such as solarthermal and concentrated PV technologies.

The thin-film component of the industry is largely made up of a broad mix of technology platforms at various stages of development,and consists of a large and growing number of medium and small companies. Two of the largest thin-film PV manufacturers are FirstSolar and Energy Conversion. First Solar manufactures PV modules using CdTe affixed to glass. Energy Conversion manufactures PVmodules using a-Si affixed to flexible metal foil. Competitors currently developing or selling CIGS-based PV modules include AvancisGmbH & Co. KG, DayStar Technologies, Inc., Flisom AG, Global Solar Energy, Inc., HelioVolt Corporation, MiaSolé, Nanosolar, Inc.,Nuvosun, Inc., Odersun AG, Q-Cells SE, Solibro GmbH, Solarion AG, Solar Frontier, SoloPower, Inc., Stion and Würth Solar GmbH &Co. We believe that a number of manufacturers that traditionally have manufactured and sold c-Si-based modules have entered, or in thefuture may enter, the market for thin-film PV modules and, potentially, CIGS-based PV modules.

Many of our existing and potential competitors have substantially greater financial, technical, manufacturing and other resources thanwe do. A competitor’s greater size provides them with a competitive advantage because they often can realize economies of scale andpurchase certain raw materials at lower prices. Many of our competitors also have greater brand name recognition, establisheddistribution networks and large customer bases. In addition, many of our competitors have well-established relationships with ourcurrent and potential partners and distributors and have extensive knowledge of our target markets. As a result of their greater size, thesecompetitors may be able to devote more resources to the research, development, promotion and sale of their products or respond morequickly to evolving industry standards and changes in market conditions than we can. Our failure to adapt to changing marketconditions and to compete successfully with existing or future competitors could materially and adversely affect our business, results ofoperations and financial condition.

A significant decrease in the price of c-Si-based PV modules could lead to pricing pressures on PV modules generally and forceus to reduce the sales price of our PV modules.

During 2011 there was a significant decrease in the prices of c-Si-based PV modules. This led to pricing pressures on PV modulesgenerally. In the face of such current and future downward pricing pressures, we might be forced to reduce the sales prices of our PVmodules, which, absent a commensurate decrease in our manufacturing costs, could materially and adversely affect our results ofoperations and financial condition and prevent us from achieving profitability.

Problems with product quality or performance may cause us to incur warranty expenses, damage our market reputation andprevent us from maintaining or increasing our market share.

We do not have sufficient life cycle data for our thin-film PV modules to reliably predict their lifespan in the field. Pending collection ofsuch data over time, we may not be able to offer customers warranty terms equivalent to those of our competitors, which may adverselyimpact sales or market acceptance of our PV modules. Further, even if we offer warranty terms equivalent to those of our competitors, atthis time we cannot guarantee that our PV modules will perform as expected during the lifespan that our customers will expect. If ourPV modules fail to perform as expected while under warranty, or if we are unable to support the warranties, sales of our PV modulesmay be adversely affected or our costs may increase, and our business, results of operations and financial condition could be materiallyand adversely affected.

We may also be subject to warranty or product liability claims against us that are not covered by insurance or are in excess of ouravailable insurance limits. In addition, quality issues can have various other ramifications, including delays in the recognition ofrevenue, loss of revenue, loss of future sales opportunities, increased costs associated with repairing or replacing products, and anegative impact on our goodwill and reputation. The possibility of future product failures could cause us to incur substantial expenses torepair or replace defective products. Furthermore, widespread product failures may damage our market reputation and reduce ourmarket share and cause sales to decline.

If the supply of PV modules exceeds the demand for those modules, then we may be forced to reduce the price of our PVmodules in order to compete effectively.

Throughout 2011, there were reductions in the then-current and expected average selling prices for PV modules. This was a result ofmany factors, most significantly the increased industry-wide manufacturing capacity, which has contributed to excess industry channelsupply. In addition, there was a concurrent scaling back of government subsidies and incentives related to solar energy, which reducedindustry demand. If either the overall PV module market or our target markets continue to encounter an overcapacity scenario, we maybe forced to scale back our business plan. If government subsidies or incentives are discontinued, further reduced or substantially



modified, or if renewable portfolio standards or similar production requirements are changed or eliminated, demand for our PV modulesin the affected country or countries could decline or never

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develop. In either case, our business, results of operations and financial condition could be materially and adversely affected.

A U.S. and global economic downturn could negatively affect our business, results of operations, and financial condition.

The 2008 financial crisis and ensuing recession affected the banking system and financial markets, resulting in a tightening in the creditmarkets; a low level of liquidity in many financial markets; and extreme volatility in credit, fixed income, and equity markets. Therecent European sovereign debt crisis has had a negative effect on world economic growth, which has increased concerns about globaleconomic recovery and a possibility of further recession. Much like the 2008 financial crisis, there could be a number of follow-oneffects from the current crisis on our business, including increased expense or inability to obtain debt financing or raise additionalcapital; insolvency of key suppliers, resulting in product delays; inability of customers to obtain credit to finance purchases of ourproducts; decreased discretionary spending on BIPV/BAPV products; less new construction and building improvement projects, and/orcustomer insolvencies. The continued economic uncertainty increases the risk that the actual amounts realized in the future on our assetswill differ significantly from the fair values currently assigned to them. The recent solvency concerns in Greece, Ireland and Spain couldhave an impact on the existence and magnitude of government sponsored initiatives related to solar installations and projects in Europe.Our success in the BIPV/BAPV markets can be affected by governmental subsidies for PV installations. Any reduction in existing orplanned subsidies could negatively impact our future revenues in these market segments.

The interests of our largest stockholder, TFG Radiant, may conflict with our interests or your interests now or in the future.

TFG Radiant currently owns approximately 19% of our common stock and has contracted to purchase shares which will result inownership of approximately 39% of our common stock upon completion. In addition, should TFG Radiant exercise its option to acquiremore shares of common stock, we expect that it would hold over 50% of our voting stock. As a result of its large holding of our shares,TFG Radiant may have the ability to prevent any transaction that requires the approval of stockholders regardless of whether otherstockholders believe that any such transaction is in their own best interests, with the exception of certain agreements TFG Radiant hasmade pursuant to the Amended and Restated Stockholders Agreement. TFG Radiant also has certain registration rights that couldimpact shareholders. Additionally, TFG Radiant currently holds one seat on our Board of Directors (and will obtain rights to a secondboard seat upon the closing of the currently pending acquisition of shares from Norsk Hydro), which affords TFG Radiant greatercontrol and influence over matters affecting our business.

On February 1, 2012, Mr. Victor Lee was appointed by our Board as our President and Chief Executive Officer. Mr. Lee has served onour Board since November 2011. Mr. Lee is the managing director of Tertius Financial Group Pte Ltd, the joint venture partner withRadiant Group in TFG Radiant. As President and Chief Executive Officer, Mr. Lee will not receive any cash, equity or othercompensation from us.

TFG Radiant may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. TFG Radiantalso may pursue opportunities (including by acquisition) that may be adverse to, or be in direct or indirect competition with us.Additionally, our potential customers may be competitors of TFG Radiant and our interests in selling to those customers could bedivergent from TFG Radiant’s competitive interests. So long as TFG Radiant continues to own a significant amount of the outstandingshares of our common stock and Mr. Lee is President and Chief Executive Officer, TFG Radiant may be able to strongly influence oreffectively control our decisions.

Currency translation risk may negatively affect our net sales, cost of equipment, cost of sales, gross margin or profitability andcould result in exchange losses.

Although our reporting currency is the U.S. dollar, we may conduct business and incur costs in the local currencies of other countries inwhich we operate, make sales or buy equipment or materials. As a result, we are subject to currency translation risk. Our futurecontracts and obligations may be exposed to fluctuations in currency exchange rates; and, as a result, our capital expenditures or othercosts may exceed what we have budgeted. Further, changes in exchange rates between foreign currencies and the U.S. dollar couldaffect our net sales and cost of sales and could result in exchange losses. We cannot accurately predict future exchange rates or theoverall impact of future exchange rate fluctuations on our business, results of operations and financial condition.

A significant increase in the price of our raw materials could lead to higher overall costs of production, which would negativelyaffect our planned product margins, or make our products uncompetitive in the PV market.

Our raw materials include high temperature plastics and various metals. Significant increases in the costs of these raw materials mayimpact our ability to compete in our target markets at a price sufficient to produce a profit.

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Our intellectual property rights or our means of enforcing those rights may be inadequate to protect our business, which mayresult in the unauthorized use of our products or reduced sales or otherwise reduce our ability to compete.

Our business and competitive position depends upon our ability to protect our intellectual property rights and proprietary technology,including any PV modules that we develop. We attempt to protect our intellectual property rights, primarily in the United States,through a combination of patent, trade secret and other intellectual property laws, as well as licensing agreements and third partynondisclosure and assignment agreements. Because of the differences in foreign patent and other laws concerning intellectual propertyrights, our intellectual property rights may not receive the same degree of protection in foreign countries as they would in the UnitedStates. Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a materialadverse effect on our business, results of operations and financial condition. Further, any patents issued in connection with our efforts todevelop new technology for PV modules may not be broad enough to protect all of the potential uses of our technology.

We also rely on unpatented proprietary technology. It is possible that others will independently develop the same or similar technologyor otherwise obtain access to our unpatented technology. To protect our trade secrets and other proprietary information, we require ouremployees, consultants and advisors to execute proprietary information and invention assignment agreements when they begin workingfor us. We cannot assure you that these agreements will provide meaningful protection of our trade secrets, know-how or otherproprietary information in the event of any unauthorized use, misappropriation or disclosure of any such trade secrets, know-how orother proprietary information. Despite our efforts to protect this information, unauthorized parties may attempt to obtain and useinformation that we regard as proprietary. If we are unable to maintain the proprietary nature of our technologies, we could be materiallyadversely affected.

In addition, when others control the prosecution, maintenance and enforcement of certain important intellectual property, such astechnology licensed to us, the protection and enforcement of the intellectual property rights may be outside of our control. If the entitythat controls intellectual property rights that are licensed to us does not adequately protect those rights, our rights may be impaired,which may impact our ability to develop, market and commercialize our products. Further, if we breach the terms of any licenseagreement pursuant to which a third party licenses us intellectual property rights, our rights under that license may be affected and wemay not be able to continue to use the licensed intellectual property rights, which could adversely affect our ability to develop, marketand commercialize our products.

If third parties claim that we are infringing or misappropriating their intellectual property rights, we could be prohibited fromselling our PV modules, be required to obtain licenses from third parties or be forced to develop non-infringing alternatives, andwe could be subject to substantial monetary damages and injunctive relief.

The PV industry is characterized by the existence of a large number of patents and frequent litigation based on allegations of patentinfringement. We are aware of numerous issued patents and pending patent applications owned by third parties that may relate to currentand future generations of solar energy. The owners of these patents may assert that the manufacture, use or sale of any of our productsinfringes one or more claims of their patents. Moreover, because patent applications can take many years to issue, there may becurrently pending applications, unknown to us, which may later result in issued patents that materially and adversely affect our business.Third parties could also assert claims against us that we have infringed or misappropriated their intellectual property rights. Whether ornot such claims are valid, we cannot be certain that we have not infringed the intellectual property rights of such third parties. Anyinfringement or misappropriation claim could result in significant costs or substantial damages to our business or an inability tomanufacture, market or sell any of our PV modules that are found to infringe or misappropriate. Even if we were to prevail in any suchaction, the litigation could result in substantial cost and diversion of resources that could materially and adversely affect our business.The large number of patents, the rapid rate of new patent issuances, the complexities of the technology involved and uncertainty oflitigation increase the risk of business assets and management’s attention being diverted to patent litigation. Even if obtaining a licensewere feasible, it could be costly and time consuming. We might be forced to obtain additional licenses from our existing licensors in theevent that the scope of the intellectual property we have licensed is too narrow to cover our activities, or in the event that the licensordid not have sufficient rights to grant us the license(s) purported granted. Also, some of our licenses may restrict or limit our ability togrant sublicenses and/or assign rights under the licenses to third parties, which may limit our ability to pursue business opportunities.

Our future success depends on retaining our Chief Executive Officer and existing management team and hiring and assimilatingnew key employees and our inability to attract or retain key personnel would materially harm our business and results ofoperations.

Our success depends on the continuing efforts and abilities of our executive officers, including Mr. Victor Lee, our President and ChiefExecutive Officer, our other executive officers, and key technical personnel. Our future success also will depend on our ability to attractand retain highly skilled employees, including management, technical and sales personnel. The loss of any



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of our key personnel, the inability to attract, retain or assimilate key personnel in the future, or delays in hiring required personnel couldmaterially harm our business, results of operations and financial condition.

Our PV modules contain limited amounts of cadmium sulfide, and claims of human exposure or future regulations could have amaterial adverse effect on our business, results of operations and financial condition.

Our PV modules contain limited amounts of cadmium sulfide, which is regulated as a hazardous material due to the adverse healtheffects that may arise from human exposure, and is banned in certain countries. We cannot assure you that human or environmentalexposure to cadmium sulfide used in our PV modules will not occur. Any such exposure could result in third party claims against us,damage to our reputation and heightened regulatory scrutiny of our PV modules. Future regulation relating to the use of cadmium invarious products could force us to seek regulatory exemptions or impact the manufacture and sale of our PV modules and could requireus to incur unforeseen environmental-related costs. The occurrence of future events such as these could limit our ability to sell anddistribute our PV modules, and could have a material adverse effect on our business, results of operations and financial condition.

Environmental obligations and liabilities could have a substantial negative impact on our financial condition, cash flows andprofitability.

We are subject to a variety of federal, state, local and foreign laws and regulations relating to the protection of the environment,including those governing the use, handling, generation, processing, storage, transportation and disposal of, or human exposure to,hazardous and toxic materials (such as the cadmium used in our products), the discharge of pollutants into the air and water, andoccupational health and safety. We are also subject to environmental laws which allow regulatory authorities to compel, or seekreimbursement for, cleanup of environmental contamination at sites now or formerly owned or operated by us and at facilities where ourwaste is or has been disposed. We may incur significant costs and capital expenditures in complying with these laws and regulations. Inaddition, violations of, or liabilities under, environmental laws or permits may result in restrictions being imposed on our operatingactivities or in our being subjected to substantial fines, penalties, criminal proceedings, third party property damage or personal injuryclaims, cleanup costs or other costs. Also, future developments such as more aggressive enforcement policies, the implementation ofnew, more stringent laws and regulations, or the discovery of presently unknown environmental conditions or non-compliance mayrequire expenditures that could have a material adverse effect on our business, results of operations and financial condition. Further,greenhouse gas emissions have increasingly become the subject of international, national, state and local attention. Although futureregulations could potentially lead to an increased use of alternative energy, there can be no guarantee that such future regulations willencourage solar technology. Given our limited history of operations, it is difficult to predict future environmental expenses.

Any change to our relationship with ITN could disrupt certain aspects of our business operations, including our research anddevelopment activities.

ITN provides us with technical services at an agreed upon cost. We have relied on these services to conduct a portion of our researchand development activities, including those related to development and improvements of new PV technologies that may affect theviability of our products in the future. If we are unable to continue our arrangement with ITN, it could materially affect our ability todeliver on our plan.

We currently anticipate having substantial international operations that will subject us to a number of risks, including potentialunfavorable political, regulatory, labor and tax conditions in foreign countries.

We expect to expand our operations abroad in the future and, as a result, we may be subject to the legal, political, social and regulatoryrequirements and economic conditions of foreign jurisdictions. Risks inherent to international operations, include, but are not limited to,the following:

• difficulty in procuring supplies and supply contracts abroad;

• difficulty in enforcing agreements in foreign legal systems;

• foreign countries imposing additional withholding taxes or otherwise taxing our foreign income, imposing tariffs or adoptingother restrictions on foreign trade and investment, including currency exchange controls;

• inability to obtain, maintain or enforce intellectual property rights;

• risk of nationalization;

• changes in general economic and political conditions in the countries in which we may operate, including changes in thegovernment incentives we might rely on;



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• unexpected adverse changes in foreign laws or regulatory requirements, including those with respect to environmentalprotection, export duties and quotas;

• difficulty with staffing and managing widespread operations;

• trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices ofour products and make us less competitive in some countries; and

• difficulty of and costs relating to compliance with the different commercial and legal requirements of the international marketsin which we plan to offer and sell our PV modules.

Our business in foreign markets will require us to respond to rapid changes in market conditions in these countries. Our overall successas an international business depends, in part, on our ability to succeed in differing legal, regulatory, economic, social and politicalconditions. If we are not able to develop and implement policies and strategies that are effective in each location where we will dobusiness, then our business, results of operations and financial condition could be materially and adversely affected.

Our failure to qualify for Small Business Innovation Research funding could adversely impact our revenues from research anddevelopment contracts.

We currently receive funding for research and development under the Small Business Innovation Research (“SBIR”) program. In 2011,our revenues generated from performance of these contracts totaled approximately $82,000. In order to continue to qualify for thisfunding, we must, among other things, remain American owned and independently operated and our size must remain under 500employees. As a result of our relationship with TFG Radiant and our planned expansion plans, we cannot guarantee that we will be ableto continue to qualify for SBIR funding. If we fail to qualify for SBIR funding, our revenues from research and development coulddecline or cease, and our net income and financial condition could be materially and adversely affected.

If the U.S. government terminates or delays any of our revenue-generating contracts with it, then the reduced funding couldmaterially and adversely affect our results of operations and financial condition.

To date, we have relied heavily upon contracts with the U.S. government and federal agencies for our revenues and to fund our researchand development activities. The U.S. government, as a counterparty to our agreements, generally has the right to unilaterally terminateor modify these contracts. If the U.S. government terminates or delays any of our contracts with it—for example, because of changedgovernment priorities, budgets or appropriations—then our ability to perform or adequately fund ongoing research and developmentactivities may be adversely affected. Further, such termination or delay could materially and adversely affect our results of operationsand financial condition.

Existing regulations and policies and changes to these regulations and policies may present technical, regulatory and economicbarriers to the purchase and use of PV products, which may significantly reduce demand for our PV modules.

The market for electricity generation products is heavily influenced by foreign, U.S., state and local government regulations and policiesconcerning the electric utility industry, as well as policies promulgated by electric utilities. These regulations and policies often relate toelectricity pricing and technical interconnection of customer-owned electricity generation. In the United States and in a number of othercountries, these regulations and policies have been modified in the past and may be modified again in the future. These regulations andpolicies could deter end-user purchases of PV products and investment in the research and development of PV technology. For example,without a mandated regulatory exception for PV systems, utility customers are often charged interconnection or standby fees for puttingdistributed power generation on the electric utility grid. These fees could increase the cost to our end-users of using PV systems andmake them less desirable, thereby harming our business, prospects, results of operations and financial condition. In addition, electricitygenerated by PV systems mostly competes with expensive peak hour electricity, rather than the less expensive average price ofelectricity. Modifications to the peak hour pricing policies of utilities, such as to a flat rate, would require PV systems to achieve lowerprices in order to compete with the price of electricity from other sources.

We anticipate that our PV modules and their use in installations will be subject to oversight and regulation in accordance with nationaland local ordinances relating to building codes, safety, environmental protection, utility interconnection and metering and relatedmatters. It is difficult to track the requirements of individual states and design equipment to comply with the varying standards. Anynew government regulations or utility policies pertaining to PV modules may result in significant additional expenses to us, our businesspartners and their customers and, as a result, could cause a significant reduction in demand for our PV modules.

Risks Relating to our Securities



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As a public company we are subject to complex legal and accounting requirements that require us to incur substantial expenses,and our financial controls and procedures may not be sufficient to ensure timely and reliable reporting of financial information,which, as a public company, could materially harm our stock price and listing on the NASDAQ Global Market.

As a public company, we are subject to numerous legal and accounting requirements that do not apply to private companies. The cost ofcompliance with many of these requirements is substantial, not only in absolute terms but, more importantly, in relation to the overallscope of the operations of a small company. Failure to comply with these requirements can have numerous adverse consequencesincluding, but not limited to, our inability to file required periodic reports on a timely basis, loss of market confidence, delisting of oursecurities and/or governmental or private actions against us. We cannot assure you that we will be able to comply with all of theserequirements or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis our privately heldand larger public competitors.

The Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) requires, among other things, that we maintain effective internal control overfinancial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing ofour internal control over financial reporting to allow management to report on the effectiveness of our internal control over financialreporting, as required by Section 404 of Sarbanes-Oxley. Our compliance with Section 404 of Sarbanes-Oxley will require that we incursubstantial accounting expense and expend significant management efforts. The effectiveness of our controls and procedures may in thefuture be limited by a variety of factors, including:

• faulty human judgment and simple errors, omissions or mistakes;

• fraudulent action of an individual or collusion of two or more people;

• inappropriate management override of procedures; and

• the possibility that any enhancements to controls and procedures may still not be adequate to assure timely and accuratefinancial information.

If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered publicaccounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, wemay be subject to NASDAQ delisting, investigations by the SEC and civil or criminal sanctions.

Our ability to successfully implement our business plan and comply with Section 404 requires us to be able to prepare timely andaccurate financial statements. We expect that we will need to continue to improve existing, and implement new operational, financialand accounting systems, procedures and controls to manage our business effectively.

Any delay in the implementation of, or disruption in the transition to, new or enhanced systems, procedures or controls may cause ouroperations to suffer, and we may be unable to conclude that our internal control over financial reporting is effective as required underSection 404 of Sarbanes-Oxley. If we are unable to complete the required Section 404 assessment as to the adequacy of our internalcontrol over financial reporting, if we fail to maintain or implement adequate controls, our ability to obtain additional financing could beimpaired. In addition, investors could lose confidence in the reliability of our internal control over financial reporting and in theaccuracy of our periodic reports filed under the Exchange Act. A lack of investor confidence in the reliability and accuracy of our publicreporting could cause our stock price to decline.

The price of our common stock may continue to be volatile.

Our common stock is currently traded on the NASDAQ Global Market. The trading price of our common stock from time to time hasfluctuated widely and may be subject to similar volatility in the future. For example, in the calendar year ended December 31, 2011, ourcommon stock traded as low as $0.36 and as high as $3.95, and in 2010, traded as low as $2.00 and as high as $6.19. The trading priceof our common stock in the future may be affected by a number of factors, including events described in these “Risk Factors.” In recentyears, broad stock market indices, in general, and smaller capitalization and PV companies, in particular, have experienced substantialprice fluctuations. In a volatile market, we may experience wide fluctuations in the market price of our common stock. Thesefluctuations may have a negative effect on the market price of our common stock regardless of our operating performance. In the past,following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted. Asecurities class action suit against us could result in substantial costs, potential liabilities and the diversion of management’s attentionand resources, and could have a material adverse effect on our financial condition.

We are not currently in compliance with the minimum bid price rule of the NASDAQ Global Market and a delisting could limitthe liquidity of our stock, increase its volatility and hinder our ability to raise capital.



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Under the rules of the NASDAQ Global Market, listed companies are required to maintain a share price of at least $1.00 per share and ifthe closing share price stays below $1.00 for a period of 30 consecutive business days, then the listed company would have a cureperiod of at least 180 days for the purpose of regaining compliance with the $1.00 per share minimum. As reported in our CurrentReport on Form 8-K filed on October 13, 2011, we received notice from the NASDAQ Global Market that we were not in compliancewith the minimum bid price rule. If our share price does not sustain an increase sufficient for us to re-gain compliance during therelevant cure period ending in April 2012 we may be subject to de-listing procedures. We are considering various options that willenable us to avoid de-listing should the cure period expire, including a transfer to the NASDAQ Capital Market in order to extend thetime that we have to regain compliance, or by effecting a reverse stock split in order to increase our share price above the required $1.00bid price.

If our common stock is delisted by NASDAQ, our common stock may be eligible for quotation on an over-the-counter quotation systemor on the pink sheets. Upon any such delisting, our common stock would become subject to the regulations of the SEC relating to themarket for penny stocks. A penny stock is any equity security not traded on a national securities exchange that has a market price of lessthan $5.00 per share. The regulations applicable to penny stocks may severely affect the market liquidity for our common stock andcould limit the ability of shareholders to sell securities in the secondary market. In such a case, an investor may find it more difficult todispose of or obtain accurate quotations as to the market value of our common stock, and there can be no assurance that our commonstock will be eligible for trading or quotation on any alternative exchanges or markets.

Delisting from NASDAQ could adversely affect our ability to raise additional financing through public or private sales of equitysecurities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity ofour common stock. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss ofinstitutional investor interest and fewer business development opportunities.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We own an approximately 138,000 square foot manufacturing and office facility in Thornton, Colorado. In addition, we currentlylease approximately 19,380 square feet of office and manufacturing space in Littleton, Colorado, which is primarily used for ourresearch and development activities. This lease expires in December 2012.

Item 3. Legal Proceedings

On October 21, 2011, we were notified that a complaint (the “Lawsuit”) was filed by Jefferies & Company, Inc. (“Jefferies”)against us in state court located in the County and State of New York.

In December 2010, Ascent and Jefferies entered into an engagement agreement (the “Fee Agreement”) pursuant to which Jefferieswas hired to act as our financial advisor in relation to certain potential transactions. In the Lawsuit, Jefferies claims that it is entitled toreceive an investment banking fee of $3 million (plus expense reimbursement of approximately $49,000) under the Fee Agreement inconnection with the August 2011 investment and strategic alliance transaction (the “Financing”) between Ascent and TFG RadiantInvestment Group Ltd. and its affiliates (“TFG Radiant”).

At the August 12, 2011 closing of the Financing, Ascent received aggregate proceeds of $7,360,000 from the sale to TFG Radiantof 6,400,000 shares of our common stock (the “Tranche 1 Shares”) at a price of $1.15 per share. TFG Radiant also received an option topurchase an additional 9,500,000 shares of Ascent stock (the “Tranche 2 Shares”) at a price of $1.55 per share. We have not receivedany proceeds from the option for the Tranche 2 Shares because such option is not currently exercisable.

Ascent has paid Jefferies the fees it believes are owed under the Fee Agreement, which are a $100,000 retainer and approximately$49,000 of out-of-pocket expenses. Ascent believes that the Financing is not a covered transaction under the Fee Agreement and,accordingly, that the Lawsuit is without merit. We intend to vigorously defend the Lawsuit.

This proceeding is subject to the uncertainties inherent in any litigation. It is subject to many uncertainties and to outcomes that arenot predictable with assurance and that may not be known for an extended period of time. We record a liability in our financial



statements for costs related to claims, including settlements and judgments, where we have assessed that a loss is probable and anamount can be reasonably estimated. It is not possible to predict the outcome for this legal proceeding. If the Lawsuit is determinedadversely to Ascent, the costs associated with this proceeding could have a material

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adverse effect on our results of operations, financial position and/or cash flows of a future period.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is traded on the NASDAQ Global Market under the symbol “ASTI.” The following table sets forth the highand low sales price information per share for our common stock for the last two completed fiscal years.

Price Range of Common Stock

High Low

Fiscal 2010First Quarter $ 6.19 $ 3.20Second Quarter $ 4.40 $ 2.57Third Quarter $ 3.28 $ 2.00Fourth Quarter $ 6.14 $ 3.01

Fiscal 2011First Quarter $ 3.95 $ 2.50Second Quarter $ 2.50 $ 0.92Third Quarter $ 1.50 $ 0.60Fourth Quarter $ 0.90 $ 0.36

Holders

As of December 31, 2011, the number of record holders of our common stock was 33, and there were no holders of preferredstock. The vast majority of our publicly traded shares of common stock are held in street name, and we believe that the number ofbeneficial owners of our common stock was approximately 11,500 as of December 31, 2011.

Dividends

The holders of common stock are entitled to receive such dividends as may be declared by our Board of Directors. During theyears ended December 31, 2011 and 2010, we did not pay any dividends, and we do not expect to declare or pay any dividends in theforeseeable future. Payment of future dividends will be within the discretion of our Board of Directors and will depend on, among otherfactors, our retained earnings, capital requirements, and operating and financial condition.

Stock Performance Graph

The following graph compares the cumulative five-year return provided shareholders on Ascent Solar Technologies, Inc. CommonStock relative to the cumulative total returns of the Russell 2000 Index (market index that tracks small cap companies) and theNASDAQ Clean Edge Green Energy U.S. Index (industry index covering five major sub-sectors; Renewable Electricity Generation,Renewable Fuels, Energy Storage & Conversion, Energy Intelligence and Advanced Energy-Related Materials).

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12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011

Ascent Solar $ 100.00 $ 857.24 $ 129.66 $ 182.76 $ 115.86 $ 13.45Russell 2000 $ 100.00 $ 98.44 $ 65.17 $ 82.87 $ 105.14 $ 100.73NASDAQ Clean EdgeGreen Energy*

$ 100.00 $ 167.17 $ 61.12 $ 88.45 $ 90.84 $ 53.77

* First date of index is 2/14/07

Assumptions:

• The graph covers the period from December 31, 2006 through December 31, 2011, the last trading day of our most recentlycompleted fiscal year.

• The graph assumes that $100 was invested in our common stock on December 31, 2006 at the closing price on that date of$2.90 per share, in the Russell 2000 Index and the NASDAQ Clean Edge Energy Index, and that all dividends, if any, werereinvested. No cash dividends have been declared or paid on our common stock.

• Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.

Item 6. Selected Financial Data

The following tables include selected financial data for each of our last five fiscal years. The statement of operations data for theyears ended December 31, 2011, 2010 and 2009 and balance sheet data as of December 31, 2011 and 2010 have been derived from theaudited financial statements appearing elsewhere in this report. The statement of operations data for the years ended December 31, 2008and 2007 and the balance sheet data as of December 31, 2009, 2008 and 2007 have been derived from our audited financial statementsappearing in our previous reports filed with the SEC. This data should be read in conjunction with the financial statements and notestherein, with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this report andwith the other financial data set forth elsewhere in this report. Our historical results of operations are not necessarily indicative of resultsof operations to be expected for future periods.

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Statements of Operations Data Year Ended December 31,

In thousands except per share data 2011 2010 2009 2008 2007

Revenue $ 3,950 $ 2,481 $ 1,464 $ 1,500 $ 1,003Research and Development Expense 24,122 24,354 15,508 10,066 4,803Selling, General and Administrative Expense 7,130 7,454 7,694 5,670 4,126Impairment Loss 78,000 1,769 — — —Loss from Operations (105,302) (31,096) (21,738) (14,236) (7,926)Net Loss (105,744) (31,234) (20,923) (13,215) (6,503)Basic and diluted net loss per share $ (3.02) $ (1.14) $ (0.93) $ (0.78) $ (0.70)

Balance Sheet Data Year Ended December 31,

In thousands 2011 2010 2009 2008 2007

Cash and investments $ 23,915 $ 44,790 $ 60,506 $ 87,350 $ 37,701Working capital 22,333 41,489 50,229 80,889 37,079Total Assets 61,425 160,021 172,661 154,212 49,817Long-Term Obligations 6,642 7,279 7,095 7,050 —Stockholders’ Equity 50,003 146,566 154,315 139,618 48,622

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our auditedfinancial statements and the notes to those financial statements appearing elsewhere in this Form 10-K. This discussion and analysiscontains statements of a forward-looking nature relating to future events or our future financial performance. As a result of manyfactors, our actual results may differ materially from those anticipated in these forward-looking statements. These statements involveknown and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance orachievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied bythese forward-looking statements.

Overview

We are a development stage company formed to commercialize flexible PV modules using our proprietary technology. For theyear ended December 31, 2011, we generated approximately $3.9 million of revenue. Our revenue from government research anddevelopment contracts was approximately $3.4 million, and our revenue from product sales was approximately$0.5 million. As ofDecember 31, 2011, we had an accumulated deficit of approximately $183.0 million. Currently, we are in limited production based onour ability to create demand within emerging and specialty markets. Products in these markets carry higher average selling prices ascompared to commodity markets. We continue to qualify our equipment and we have adjusted our utilization of equipment based on ournear term forecast. In the near term we intend to focus on emerging and specialty markets with higher average selling prices, shiftingour focus to rooftop applications in the longer term. Under our current business plan, we expect losses to continue until annualproduction reaches approximately 30 MW or more. We intend to augment our own manufacturing capabilities by licensing ourproprietary manufacturing processes to others. Although we plan to continue manufacturing at our current facilities, our plans are also tohave significant future production capacity enabled through partnerships, joint ventures or other commercial or licensing arrangements.To date, we have financed our operations primarily through public and private equity financings.

Throughout 2011, we worked with dozens of customers in prototyping and developing applications for our products. Substantiallyall equipment necessary for production has been delivered as of December 31, 2011. Our 2011 production volumes were basedprimarily on market demand for our products in emerging and specialty markets. In March 2011, based on market conditions, werevised our near-term strategy to focus on applications for emerging and specialty markets, including off-grid, military and defense andconsumer oriented products, which we believe will better leverage the unique characteristics of our product and carry higher averageselling prices. Our long-term strategy is focused on these markets and the BIPV/BAPV markets.



Significant Trends, Uncertainties and Challenges

We believe that the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance andresults of operations include:

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• Our ability to qualify production tools to achieve desired production yields, throughput, module efficiencies and otherperformance targets, and to obtain necessary or desired certifications for our PV modules, in a timely manner;

• Our ability to maintain the listing of our common stock on the NASDAQ Global Market or Capital Market and the potentialimpact of a possible delisting on the market liquidity and price volatility of our common stock;

• Our ability to achieve projected operational performance and cost metrics;

• Our ability to consummate strategic relationships with key partners, including OEMs, customers, system integrators, value-added resellers and distributors who deal directly with manufacturers and end-users in the BIPV/BAPV, portable power, EIPVand government/defense solar panel markets;

• The availability of, or changes to, government policies, subsidies and incentives that effect the use or cost of renewable energy;

• Consumer acceptance of and demand for our products;

• Changes in the supply and demand for PV modules as well as fluctuations in selling prices for PV modules worldwide;

• Our ability to raise additional capital on terms favorable to us;

• Our ability to manage the planned expansion of our manufacturing facilities, operations and personnel;

• Our ability to enter into commercially viable licensing, joint ventures or other commercial arrangements;

• Our ability and the ability of our distributors, suppliers and customers to manage operations and orders and timely delivery ofproduction tools; and

• Availability of raw materials.

Basis of Presentation: Our activities to date have consisted substantially of raising capital, research and development, andestablishment of our production operation. Revenues to date have been generated primarily from our governmental research anddevelopment contracts and have not been significant. Our planned principal operations to commercialize flexible PV modules havecommenced, but have generated limited revenue to date. Accordingly, we are considered to be in the development stage and we haveprovided additional disclosure of inception to date activity in our Statements of Operations, Statements of Stockholder’s Equity andComprehensive Income (Loss) and Statements of Cash Flows.

Significant Accounting Policies

Investments: We classify our investments as “available-for-sale.” Such investments are carried at fair value, based on quotedmarket prices with the unrealized holding gains and losses reported as “Accumulated other comprehensive income (loss)” in thestockholders’ equity section of our balance sheets included herein. Realized gains and losses on sales of securities are computed usingthe specific identification method. We evaluate declines in market value for potential impairment. If the decline results in a value belowcost and is determined to be other than temporary, the investment is written down to its impaired value and a new cost basis isestablished.

Fair Value Estimates: The fair value of an asset or liability is the amount at which it could be exchanged or settled in a currenttransaction between willing parties. We have recorded investments at fair value and have classified them as Level 1, 2 or 3 within thefair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities.Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices and other inputs that can becorroborated by observable market data. Fair values determined by Level 3 inputs utilize unobservable data points for the asset orliability.

In addition to the items measured at fair value on a recurring basis, in conjunction with the significant impairment loss taken in2011, we also measured certain property, plant and equipment at fair value on a nonrecurring basis. These fair value measurements relyprimarily on our specific inputs and assumptions about the use of the assets, as observable inputs are not available. Accordingly, wedetermined that these fair value measurements reside primarily within Level 3 of the fair value hierarchy. The carrying value for cashand cash equivalents, restricted cash, accounts receivable, accounts payable, accrued property plant, and equipment, accrued expensesand other assets and liabilities approximate their fair values due to their short maturities.



Revenue Recognition: Revenue from governmental research and development contracts is generated under terms that are costplus fee or firm fixed price. Revenue from cost plus fee contracts is recognized as costs are incurred on the basis of direct

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costs plus allowable indirect costs and an allocable portion of the fixed fee. Revenue from firm fixed price contracts is recognized underthe percentage-of-completion method of accounting, with costs and estimated profits included in contract revenue as work is performed.If actual and estimated costs to complete a contract indicate a loss, provision is made currently for the loss anticipated on the contract.Revenue from commercial sales of flexible PV modules is recognized as modules are delivered and title has transferred to the customer.Product revenue through December 31, 2011 is included in research and development revenue as we are in the development stage andsuch revenues (totaling $538,005 for the year ended December 31, 2011) were generated from a limited number of customers as theproduct is being brought to market.

Inventories: All inventories are stated at the lower of cost or market, with cost determined using the weighted average method.Elements of cost include raw material acquisition and conversion costs, an allocated portion of indirect production costs, inventorymaintenance costs and depreciation and amortization. When plant capacity is significantly underutilized, allocated costs included ininventories are based on a normal level of activity, with the excess costs charged to expense in the period incurred.

Inventory balances are frequently evaluated to ensure that they do not exceed net realizable value. The computation for netrealizable value takes into account many factors, including expected demand, product lifecycle and development plans, moduleefficiency, quality issues, obsolescence and others. If actual demand and market conditions are less favorable than those estimated bymanagement, additional inventory write-downs may be required. Our inventories have a long life cycle and obsolescence is not asignificant factor in their valuation.

Property, Plant and Equipment: Property, plant and equipment are recorded at the original cost to us. Assets are depreciatedover estimated useful lives of three to forty years using the straight-line method, as presented in the table below, commencing when theasset is placed in service. Leasehold improvements are depreciated over the shorter of the remainder of the lease term or the life of theimprovements. Upon retirement or disposal, the cost of the asset disposed of and the related accumulated depreciation are removed fromthe accounts and any gain or loss is reflected in income. Expenditures for repairs and maintenance are expensed as incurred.

Useful Livesin Years

Buildings 40Manufacturing machinery and equipment 5 - 10Furniture, fixtures, computer hardware/software 3 - 7Leasehold improvements life of lease

Long-lived assets: We analyze long-lived tangible assets (property, plant and equipment) and definitive-lived intangible assets(patents) for impairment by assessing if the asset cost will be recoverable. Events that might cause impairment would include significantcurrent period operating or cash flow losses associated with the use of a long-lived asset or group of assets combined with a history ofsuch losses, significant changes in the manner of use of assets and significant negative industry or economic trends. During 2011 and2010, we incurred significant impairments of our manufacturing facilities and equipment in the amounts of $78.0 million and $1.8million, respectively, based on estimates prepared by management, as well as a valuation analysis by and independent firm.

Research and Development Costs: Research and development costs are incurred during the process of researching anddeveloping new products and enhancing our manufacturing processes and consist primarily of compensation and related costs forpersonnel, materials, supplies and equipment depreciation. We expense these costs as incurred until the resulting product has beencompleted and tested and is ready for commercial manufacturing. We also incur research and development expenses on federalgovernment research and development contracts and expense as incurred.

Share-Based Compensation: We measure and recognize compensation expense for all share-based payment awards made toemployees, officers, directors, and consultants based on estimated fair values. We estimate the fair value of share-based payment awardson the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest isrecognized as expense over the requisite service period in our statements of operations included herein. Share-based compensation isbased on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant andrevised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. For purposes of determining estimated fairvalue of share-based payment awards on the date of grant, we use the Black-Scholes option-pricing model (“Black-Scholes Model”) foroption awards. The Black-Scholes Model requires the input of highly subjective assumptions. Because our employee stock options mayhave characteristics significantly different from those of traded options, and because changes in the subjective input assumptions canmaterially affect the fair value estimate, in management’s opinion, the existing models may not provide a reliable single measure of thefair value of our employee stock



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options. Management will continue to assess the assumptions and methodologies used to calculate estimated fair value of share-basedcompensation. Circumstances may change and additional data may become available over time, which result in changes to theseassumptions and methodologies, which could materially impact our fair value determination. We estimate the fair value of our restrictedstock awards at our stock price on the grant date.

The accounting guidance for share-based compensation may be subject to further interpretation and refinement over time. Thereare significant differences among option valuation models, and this may result in a lack of comparability with other companies that usedifferent models, methods and assumptions. If factors change and we employ different assumptions in the accounting for share-basedcompensation in future periods, or if we decide to use a different valuation model, the compensation expense that we record in the futuremay differ significantly from what it has recorded in the current period and could materially affect our loss from operations, net loss andnet loss per share.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expensesduring the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements: In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement Topic (Topic 820):Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This AccountingStandards Update ("ASU") provides a consistent definition of fair value and sets forth common requirements for measurement of anddisclosure about fair value in accordance with U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04amends existing fair value measurement and disclosure requirements including application of highest and best use and valuationpremise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity, measuring the fairvalue of financial instruments that are valued within a portfolio and disclosures in measurement categorized within Level 3 of the fairvalue hierarchy. This ASU is effective on a prospective basis during interim and annual periods beginning after December 15, 2011 andearly application is not permitted. We do not expect the adoption of ASU 2011-04 will have a material impact on our financial position,results of operations or cash flows.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ThisASU seeks to improve comparability, consistency and transparency of financial reporting with respect to comprehensive income byeliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity,among other amendments. The amendments of this ASU require all non-owner changes in stockholders’ equity be presented either in asingle continuous statement of comprehensive income or two separate but consecutive statements. This ASU is effective for fiscal yearsand interim periods beginning after December 15, 2011 and early adoption is permitted. The adoption of ASU 2011-05 will affect onlyfinancial statement presentation and will not impact our financial position, results of operations or cash flows.

Results of Operations

Comparison of the Years Ended December 31, 2011 and 2010

Our activities to date have substantially consisted of raising capital, business and product development, research and developmentand the development of our production lines.

Revenues. Our revenues were $3,949,911 for the year ended December 31, 2011 compared to $2,481,489 for the year endedDecember 31, 2010, an increase of $1,468,422. Revenues for the year ended December 31, 2011 and December 31, 2010 includedproduct sales of $538,005 and $811,906, respectively. Revenues earned on our government research and development contractsincreased by $1,742,323 for the year ended December 31, 2011 as a result of two new government contracts that were entered into andbegan generating revenue in June 2010.

Research and development. Research and development costs were $24,121,766 for the year ended December 31, 2011 comparedto $24,354,224 for the year ended December 31, 2010, a decrease of $232,458. Research and development costs include the costsincurred for pre-production, production activities in our manufacturing facility and facility and equipment infrastructure costs. Researchand development costs also include costs related to our governmental contracts. Costs related to pre-production and production activitiesdecreased by approximately $1,555,000. The pre-production cost decreases were comprised of personnel related costs of approximately$1,720,000, consulting and contract services of approximately $1,014,000, facility related costs of approximately $602,000 and stockoption expense of approximately $356,000, offset by increases in depreciation and amortization of approximately $1,321,000 andmaterials and equipment related costs of approximately $841,000. Governmental research and development costs increased byapproximately $1,323,000. The governmental research and development cost increases were comprised of consulting and contract



service of approximately $1,211,000 and personnel related costs of approximately $179,000, offset by decreases in facilities relatedcosts of

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approximately $114,000.

Selling, general and administrative. Selling, general and administrative expenses were $7,130,530 for the year endedDecember 31, 2011 compared to $7,453,830 for the year ended December 31, 2010, a decrease of $323,300. This decrease is primarilythe result of reductions in stock option expense of approximately $812,000, personnel related costs of approximately $308,000 anddepreciation and amortization expense of approximately $268,000, offset by increases in facility related costs of approximately$369,000, general supplies expenses of approximately $258,000, legal expenses of approximately $204,000, consulting and contractservices of approximately $164,000, public company expenses of approximately $60,000 and marketing costs of approximately$26,000.

Impairment loss. As a result of significant changes in market conditions, particularly the decreases in current and expected averageselling prices for PV modules, an impairment charge was taken against Property, Plant and Equipment during the second quarter of2011. The impairment loss incurred on the write-down of Property, Plant and Equipment and Deposits on manufacturing equipment was$78,000,000 for year ended December 31, 2011 compared to $1,769,480 for year ended December 31, 2010, an increase of$76,230,520.

Interest expense. Interest expense was $113,471 and $0 for the years ended December 31, 2011 and 2010, respectively. Interestcosts of $351,632 and $479,898 were incurred and capitalized as property, plant and equipment for the years ended December 31, 2011and 2010, respectively. Interest incurred relates to our CHFA loan utilized for our production facility expansion in Thornton, Colorado.

Interest income. Interest income was $52,915 for the year ended December 31, 2011 compared to $42,756 for the year endedDecember 31, 2010, an increase of $10,159. Interest income represents interest on cash and short-term investments. Despite loweraverage cash balance, interest income increased due to slight improvements in interest rates in 2011 as compared to 2010.

Contract cancellation loss. Due to changes in our strategy, during the third quarter of 2011 we canceled delivery of certainequipment. As a result we recorded a loss of $590,774 for year ended December 31, 2011.

Realized gain (loss) on forward contracts. Realized gain (loss) on forward contracts includes gains and losses incurred whenforward contracts mature. For the year ended December 31, 2011, we recorded a realized gain on forward contracts of $63,915compared to $0 for the year ended December 31, 2010. The gain recorded for the year ended December 31, 2011 was generated fromthe exercise of foreign currency options held to hedge future equipment payments to be remitted in Yen.

Foreign currency transaction gain (loss). Foreign currency transaction gain (loss) is calculated on cash held in foreign currenciesto reflect the current exchange rate. Foreign currency transaction gain was $145,940 for the year ended December 31, 2011 compared toforeign currency transaction loss of $180,621 for the year ended December 31, 2010, a net change of $326,561. The decreases andincreases are the result of changes in the exchange rate related to our deposits of foreign currencies.

Net Loss. Our Net Loss was $105,743,860 for the year ended December 31, 2011 compared to a Net Loss of $31,233,718 for theyear ended December 31, 2010, an increase in Net Loss of $74,510,142. The increase in Net Loss for the year ended December 31, 2011can be summarized in variances in significant account activity as follows:

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(Increase) decreasein Net Loss

For the Year EndedDecember 31, 2011

Compared to the Year EndedDecember 31, 2010

Revenues $ 1,468,422Research and development costs

Manufacturing research and development (1,295,593)Government research and development 1,199,208Non-cash stock based compensation 328,843

Selling, general and administrative expensesCorporate selling, general and administrative (488,718)Non-cash stock based compensation 812,018

Impairment loss (76,230,520)Interest expense (113,471)Interest income 10,159Contract cancellation loss (590,774)Realized gain on investments (192)Realized gain (loss) on forward contracts 63,915Foreign currency transaction gain (loss) 326,561

Increase to Net Loss $ (74,510,142)

Comparison of the Years Ended December 31, 2010 and 2009

Revenues. Our revenues were $2,481,489 for the year ended December 31, 2010 compared to $1,464,346 for the year endedDecember 31, 2009, an increase of $1,017,143. Revenues for the year ended December 31, 2010 included $811,906 of product sales,which constitutes the majority of the increase. Revenues earned on our government research and development contracts increased by$288,515 for the year ended December 31, 2010 as a result of two new government contracts that were entered into and begangenerating revenue in June 2010.

Research and development. Research and development costs were $24,354,224 for the year ended December 31, 2010 comparedto $15,508,209 for the year ended December 31, 2009, an increase of $8,846,015. Research and development costs include the costsincurred for pre-production and production activities in our manufacturing facility and equipment infrastructure costs. Research anddevelopment costs also include costs related to our governmental contracts. Costs related to pre-production and production activitiesincreased approximately $8,319,000. The pre-production cost increases were comprised of materials and equipment related costs ofapproximately $1,444,000, depreciation and amortization of approximately $3,875,000, personnel related costs of approximately$1,583,000, facility related costs of approximately $706,000, and consulting and contract services of approximately $588,000, offset bya decrease in stock compensation expense of approximately $85,000. Governmental research and development costs increased byapproximately $527,000. The research and development cost increases were comprised of materials and equipment related costs ofapproximately $225,000, facilities related costs of approximately $165,000, and depreciation and amortization of approximately$140,000, offset by decreases in stock option expense of approximately $48,000 and personnel costs of approximately $16,000.

Selling, general and administrative. Selling, general and administrative expenses were $7,453,830 for the year endedDecember 31, 2010 compared to $7,694,566 for the year ended December 31, 2009, a decrease of $240,736. This decrease is the resultof reductions in consulting and contract services of approximately $501,000 and approximately $124,000 in legal expense, offset byincreases of approximately $68,000 in facility costs, approximately $170,000 in stock compensation expense and approximately$146,000 in personnel related costs associated with increased headcount.

Impairment loss. During the fourth quarter of 2010, there was a significant change in the planned usage of two manufacturingtools which impaired their value. Impairment loss incurred on the write-down of manufacturing tools was $1,769,480 for the year endedDecember 31, 2010 compared to $0 for the year ended December 31, 2009.



Interest expense. Interest costs of $479,898 and $456,534 were incurred and capitalized into our property, plant and equipmentfor the years ended December 31, 2010 and 2009, respectively. Interest incurred relates to our CHFA loan utilized for our productionfacility expansion in Thornton, Colorado.

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Interest income. Interest income was $42,756 for the year ended December 31, 2010 compared to $531,697 for the year endedDecember 31, 2009, a decrease of $488,941. Interest income represents interest on cash and short term investments. The decrease ininterest income is due to significantly lower interest rates in 2010 as compared to 2009 as well as a lower average cash balance.

Realized gain (loss) on forward contracts. Realized gain (loss) on forward contracts include gains and losses incurred whenforward contracts mature. The realized loss on forward contracts was $0 for the year ended December 31, 2010 compared to $1,128,326for the year ended December 31, 2009.

Unrealized gain on forward contracts. Unrealized gain on forward contracts reflects the difference between the spot rate and theforward rate on our forward contracts. Unrealized gains and losses on forward contracts are reversed when the contracts are settled. Forthe year ended December 31, 2010, the unrealized gain on forward contracts was $0 compared to $766,403 for the year endedDecember 31, 2009, the year in which all contracts matured.

Foreign currency transaction gain (loss). Foreign currency transaction gain (loss) is calculated on cash held in foreign currenciesto reflect the current exchange rate. Foreign currency transaction loss was $180,621 for the year ended December 31, 2010 compared toforeign currency transaction gain of $586,555 for the year ended December 31, 2009, a net change of $767,176.

Net Loss. Our Net Loss was $31,233,718 for the year ended December 31, 2010 compared to a Net Loss of $20,922,717 for theyear ended December 31, 2009, an increase in Net Loss of $10,311,001. The increase in Net Loss for the year ended December 31, 2010can be summarized in variances in significant account activity as follows:

(Increase) decreasein Net Loss

For the Year EndedDecember 31, 2010

Compared to the Year EndedDecember 31, 2009

Revenues $ 1,017,143Research and development costs

Manufacturing research and development (8,406,423)Government research and development (572,710)Non-cash stock based compensation 133,118

Selling, general and administrative expensesCorporate selling, general and administrative 410,365Non-cash stock based compensation (169,629)

Impairment loss (1,769,480)Interest expense —Interest income (488,941)Realized gain on investments (59,191)Realized gain (loss) on forward contracts 1,128,326Unrealized gain on forward contracts (766,403)Foreign currency transaction gain (loss) (767,176)

Increase to Net Loss $ (10,311,001)

Liquidity and Capital Resources

As of December 31, 2011, we had approximately $23.9 million in cash and investments and working capital of approximately$22.3 million. We also had approximately $1.4 million in restricted cash securing equipment purchases which is included in “OtherAssets” on our balance sheets included herein. We have remaining obligations for equipment purchases in the approximate amount of$4.1 million, of which approximately $1.6 million is recorded in “Accrued property, plant and equipment.”

On March 31, 2011, we announced a change in strategy that, in the near term, will focus our solar module technology onapplications for emerging and specialty markets. Longer term we intend to participate in the building integrated market. The change in



strategy resulted in a change in leadership and sizing the company to a new cost structure, primarily through the termination of a portionof our workforce. We incurred a charge of approximately $450,000 in the quarter ended March 31,

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2011, comprised of severance costs. This charge has been expensed as “Research and development” and “Selling, general andadministrative” in our accompanying statements of operations in the amounts of approximately $72,000 and $378,000, respectively.Approximately $139,000 is recorded under "Accrued expenses" in our balance sheets as of December 31, 2011 included herein.

Due to recent significant adverse changes in market conditions, particularly the decreases in current and expected average sellingprices for PV modules, we concluded in the quarter ended June 30, 2011 that the carrying value of Property, Plant and Equipment andDeposits on manufacturing equipment may not be recoverable and a non-cash impairment charge of approximately $78.0 million wasrecorded.

The use of cash for operational expenses averaged approximately $1.0 million per month during the quarter ended December 31,2011 compared to approximately $2.5 million per month during the quarter ended March 31, 2011, the date of the change in strategy,which reflects a decrease of approximately $1.5 million per month. Cash used for operational expenses is related to manufacturing andengineering activities, research and development, business development and general corporate expenses. As of December 31, 2011, wehad 77 full-time employees and 10 contractors provided through an employment services provider. We expect our current cash balanceto be sufficient to cover our planned capital and operational expenditures through December 31, 2012 based on currently known factorsand limited projected revenues. We expect that we may need to raise additional capital to cover our operating losses and futuremanufacturing capacity expansion. The capital markets are currently volatile and there is no assurance that we will be able to raiseadditional capital on acceptable terms or at all. We currently are pursuing various avenues to obtain additional capital for furtherexpansion.

For the twelve months ended December 31, 2011, our cash used in operations was approximately $19.9 million compared toapproximately $21.6 million for the twelve months ended December 31, 2010, a decrease of $1.7 million. The decrease in cash used inoperating activities for the year ended December 31, 2011 as compared to the same period in 2010 was primarily due to a decrease innet loss after deducting non cash adjustments, decrease in inventory purchases and net decrease in other assets. Partially offsetting thedecrease in cash used in operations was a net decrease in other liabilities and increase in foreign currency transaction gain.

The total net change in cash and cash equivalents for the year ended December 31, 2011 was a decrease of approximately $16.0million. The decrease in cash and cash equivalents was primarily the result of (i) negative cash from operating activities ofapproximately $19.9 million, primarily as a result of net loss (adjusted for non-cash expenses and other items such as depreciation andamortization, non-cash based stock based compensation, impairment on property, plant and equipment and cancellation fees andforfeited deposits on equipment), increases in inventories and decreases in other liabilities, partially offset by decreases in other assets,and (ii) negative cash from investing activities of approximately $3.0 million as a result of purchases of plant, property and equipment,partially offset by net purchases and maturities of available-for-sale securities and cash restricted for purchasing of manufacturingequipment. The decrease in cash and cash equivalents was partially offset by cash received from financing activities of approximately$7.0 million. The primary source of cash within financing activities was approximately $7.5 million in proceeds from sale of commonstock, including approximately $7.2 million in net proceeds received from the August 2011 sale of stock to TFG Radiant.

On January 9, 2009, we filed a “shelf” Registration Statement on Form S-3 with the SEC. The SEC declared the registrationstatement effective on January 16, 2009. The shelf registration was utilized in connection with our public offering of approximately4.6 million shares that closed on October 6, 2009 with gross proceeds of approximately $30 million. The shelf registration was furtherused with a public offering of approximately 5.3 million shares that closed on November 16, 2010 with gross proceeds of approximately$21.8 million. Through December 31, 2011, sales of $0.3 million were completed through an at-the-market facility established onFebruary 28, 2011. This facility was terminated on January 4, 2012.

On August 12, 2011, we completed a strategic alliance with TFG Radiant. As part of this strategic alliance, TFG Radiant acquired6,400,000 shares of our common stock at a price of $1.15 per share or $7,360,000 in the aggregate. The closing price of our commonstock on August 12, 2011 was $0.73. In addition, TFG Radiant received an option to acquire an additional 9,500,000 shares of ourcommon stock at an exercise price of $1.55 per share. The option was approved by our shareholders on October 27, 2011. This approvaleliminated certain registration rights which would have been otherwise available to TFG Radiant related to the 6,400,000 sharepurchase. TFG Radiant may not exercise this option unless and until TFG Radiant meets a specified milestone associated with theconstruction of the first East Asia FAB. This option expires on February 12, 2014.

On October 27, 2011, our Shareholders approved an increase in the number of authorized shares of common stock to 125,000,000.

On December 29, 2011, we filed a “shelf” Registration Statement on Form S-3 with the SEC. With the shelf registration, we mayfrom time to time sell common stock, preferred stock, warrants or some combination in one or more offerings for up to $25.0 million.The registration became effective February 14, 2012. The new shelf registration replaces the previous shelf



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registration which, in accordance with SEC rules, expired in early 2012 .

On January 5, 2012, we entered into an At the Market Offering Sales Agreement pursuant to which we may issue and sell suchnumber of shares of our common stock having an aggregate offering price of up to $5,000,000. Sales of common stock, if any, will bemade at market prices by any method that is deemed an "at-the-market" offering as defined in Rule 415 under the Securities Act,including sales made directly on the NASDAQ stock exchange and any other trading market for our common stock, and sales to orthrough a market maker other than on an exchange. There is no assurance we will be able to sell shares of our common stock under thisagreement at acceptable prices or at all. The aggregate compensation payable to the sales agent shall be equal to 3% of the gross salesprice of the shares sold. As of March 22, 2012, 1,594,395 shares had been sold under this facility with net proceeds of $1,234,415.

Recent Developments

On February 1, 2012, we announced the appointment of Victor Lee as President and Chief Executive Officer. Mr. Lee has servedon our Board since November 2011. Mr. Lee is the managing director of Tertius Financial Group Pte Ltd, the joint venture partner withRadiant Group in TFG Radiant. As President and Chief Executive Officer, Mr. Lee will not receive any cash, equity or othercompensation.

Contractual Obligations

The following table presents our contractual obligations as of December 31, 2011. Our long-term debt obligation is related to ourbuilding loan and includes both principal and interest. Our purchase obligations include orders for equipment, inventory and operatingexpenses.

Payments Due by Year (in thousands)

Contractual Obligations TotalLess Than

1 Year 1-3 Years 3-5 YearsMore Than

5 Years

Long-term debt obligations $ 11,556 $ 1,094 $ 2,081 $ 1,387 $ 6,994Operating lease obligations 169 169 — — —Purchase obligations 4,426 4,426 — — —

Total $ 16,151 $ 5,689 $ 2,081 $ 1,387 $ 6,994

Off Balance Sheet Transactions

As of December 31, 2011, we did not have any off balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Risk

Historically, we have purchased manufacturing equipment internationally, which exposes us to foreign currency risk.

In July 2008 and March 2009, we entered into fair value hedges utilizing forward contracts designed to match scheduledcontractual payments to equipment suppliers, which are payments denominated in Euros and Yen. The total notional value of the Euroforward contracts was €6.4 million with various contract settlement dates beginning September 15, 2008 through July 31, 2009. Thetotal notional value of the Yen forward contracts was ¥521.4 million with contract settlement dates of March and April 2009. Thoseforward contracts had been settled as of December 31, 2009 and the currencies contracted for were delivered to us. However, not allpayments have been made to our equipment suppliers, and we continue to have foreign currency risk. Included in Restricted cash is$1,427,053 related to €1,101,801 held as of December 31, 2011 in our bank account for future payments to equipment suppliers. Basedon our overall currency rate exposure as of December 31, 2011, a near-term 10% appreciation or depreciation in the U.S. Dollar, relativeto our foreign currencies on deposit, would have a positive or negative impact of approximately $0.1 million on our results ofoperations.

Although our reporting currency is the U.S. Dollar, we may conduct business and incur costs in the local currencies of othercountries in which we may operate, make sales and buy materials. As a result, we are subject to currency translation risk. Further,changes in exchange rates between foreign currencies and the U.S. Dollar could affect our future net sales and cost of sales and couldresult in exchange losses.



Generally, our objective is to fix the dollar amount of our foreign currency denominated manufacturing equipment purchases at thetime of order. Although our hedging activity described below is designed to fix the dollar amount to be

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expended, the asset purchased is recorded at the spot foreign currency rate in effect as of the date of the payment to the supplier. Thedifference between the spot rate and the forward rate has been reported as gain or loss on forward contract. We cannot accurately predictfuture exchange rates or the overall impact of future exchange rate fluctuations on our business, results of operations and financialcondition.

Interest Rate Risk

Our exposure to market risks for changes in interest rates relates primarily to our cash equivalents and investment portfolio. As ofDecember 31, 2011, our cash equivalents consisted of money market funds, investments in U.S. government securities and high qualitycorporate securities. The primary objective of our investment activities is to preserve principal and provide liquidity on demand, whileat the same time maximizing the income we receive from our investments without significantly increasing risk. The direct risk to usassociated with fluctuating interest rates is limited to our investment portfolio, and we do not believe that a change in interest rates willhave a significant impact on our financial position, results of operations or cash flows.

Credit Risk

We have certain financial and derivative instruments that potentially subject us to credit risk. These consist primarily of cash, cashequivalents, restricted cash, investments, and forward foreign currency option contracts. We are exposed to credit losses in the event ofnonperformance by the counter parties to our financial and derivative instruments. We place cash, cash equivalents, investments andforward foreign currency option contracts with various high-quality financial institutions, and exposure is limited at any one institution.We continuously evaluate the credit standing of our counter party financial institutions.

Item 8. Financial Statements and Supplementary Data

The Financial Statements and Supplementary Data required by this item are included in Part IV, Item 15(a)(1) and are presentedbeginning on Page F-1.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reportsfiled or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarizedand reported within the time periods specified in Securities and Exchange Commission rules and forms. Our disclosure controls andprocedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in ourreports filed under the Exchange Act is accumulated and communicated to management as appropriate to allow timely decisionsregarding required disclosures. Our management conducted an evaluation required by Rules 13a-15 and 15d-15 under the Exchange Actof the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the Exchange Act as ofDecember 31, 2011. Based on this evaluation, our management concluded that the design and operation of our disclosure controls andprocedures were effective as of December 31, 2011.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined inRules 13a-15(f) and 15d-15(f) under the Exchange Act. Our system of internal control over financial reporting is designed to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles in the United States of America and includes those policies and proceduresthat:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions ofour assets;



• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition

31



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of our assets that could have a material effect on our financial statements.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31,2011 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting waseffective as of December 31, 2011. Our management reviewed the results of its assessment with the Audit Committee.

This annual report does not include an attestation report from our independent registered public accounting firm regarding internalcontrol over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant toSarbanes-Oxley Rule 404(c).

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under theExchange Act) that occurred during the quarter ended December 31, 2011 that have materially affected, or are reasonably likely tomaterially affect, our internal control over financial reporting.

Item 9B. Other Information

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Incorporated by reference from the definitive proxy statement for our 2012 annual meeting of stockholders, which will be filed nolater than 120 days after the close of our fiscal year ended December 31, 2011.

Item 11. Executive Compensation


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information as of December 31, 2011 relating to all of our equity compensation plans:

Number of securitiesto be issued upon

exercise of outstandingoptions, warrants and

rights (1)

Weighted-averageexercise price of

outstandingoptions, warrants and

rights

Number of securitiesremaining availablefor future issuance

under equitycompensation plans

Equity compensation plans approved by security holders 1,445,901 $ 2.58 2,265,791

(1) This column does not include 240,750 restricted stock awards or units.

Item 13. Certain Relationships and Related Transactions, and Director Independence




Item 14. Principal Accounting Fees and Services


PART IV

Item 15. Exhibits and Financial Statement Schedules

32



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(a) The following documents are filed as part of this Annual Report on Form 10-K:

(1) Financial Statements—See Index to Financial Statements at Item 8 of the Annual Report on Form 10-K.

(2) Financial Statement Schedules—Supplemental schedules are not provided because of the absence of conditions underwhich they are required or because the required information is given in the financial statements or notes thereto.

(3) Exhibits: See Item 15(b) below.

(b) Exhibits: The exhibits listed on the accompanying Index to Exhibits on this Form 10-K are filed or incorporated into this Form10-K by reference.

33



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ASCENT SOLAR TECHNOLOGIES, INC.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned, thereunto duly authorized on the 22nd day of March, 2012.


By: /S/ VICTOR LEE

Lee Kong Hian (aka Victor Lee)President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following personson behalf of the registrant in the capacities and on the dates indicated.

Signature Capacities Date

/S/ VICTOR LEE

Lee Kong Hian (aka Victor Lee)President & Chief Executive Officer and a Director(Principal executive officer)

March 22, 2012

/S/ GARY GATCHELL

Gary GatchellChief Financial Officer (Principal financial andaccounting officer) March 22, 2012

/S/ AMIT KUMAR

Amit Kumar, Ph.D.Chairman of the Board of Directors March 22, 2012

/S/ RICHARD SWANSON

Richard SwansonDirector March 22, 2012

/S/ G. THOMAS MARSH

G. Thomas MarshDirector March 22, 2012

/S/ KIM J. HUNTLEY

Kim J. HuntleyDirector March 22, 2012

/S/ HANS OLAV KVALVAAG

Hans Olav KvalvaagDirector March 22, 2012

34



Table of Contents

Ascent Solar Technologies, Inc.

Index to Financial Statements

Page

Report of Independent Registered Public Accounting Firm F - 1

Balance Sheets—As of December 31, 2011 and 2010 F - 2

Statements of Operations—For the years ended December 31, 2011, 2010 and 2009 and for the periodfrom inception (October 18, 2005) through December 31, 2011 F - 3

Statements of Stockholders’ Equity and Comprehensive Income (Loss)—For the period frominception (October 18, 2005) through December 31, 2011 F - 4

Statements of Cash Flows—For the years ended December 31, 2011, 2010, and 2009 and for theperiod from inception (October 18, 2005) through December 31, 2011 F - 7

Notes to Financial Statements F - 8



Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of DirectorsAscent Solar Technologies, Inc.Thornton, Colorado

We have audited the accompanying balance sheets of Ascent Solar Technologies, Inc. (a Development Stage Company) as ofDecember 31, 2011 and 2010 and the related statements of operations, stockholders’ equity and comprehensive income (loss) and cashflows for the years ended December 31, 2011, 2010 and 2009 and for the period from inception (October 18, 2005) throughDecember 31, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal controlover financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing auditprocedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AscentSolar Technologies, Inc. as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years endedDecember 31, 2011, 2010 and 2009 and for the period from inception (October 18, 2005) through December 31, 2011 in conformitywith U.S. generally accepted accounting principles.

/s/ HEIN & ASSOCIATES LLP

Denver, ColoradoMarch 22, 2012

F - 1



Table of ContentsASCENT SOLAR TECHNOLOGIES, INC.

(A Development Stage Company)

BALANCE SHEETS

December 31, 2011 December 31, 2010ASSETS

Current Assets:

Cash and cash equivalents $ 11,298,885 $ 27,303,217Investments 12,616,097 17,486,409Trade receivables, net of allowance for doubtful accounts of $5,839 and $0, respectively 342,087 485,026Related party receivable — 2,524Inventories 2,469,123 1,876,834Prepaid expenses and other current assets 386,624 510,348

Total current assets 27,112,816 47,664,358Property, Plant and Equipment: 36,897,531 110,709,320

Less accumulated depreciation and amortization (7,964,875) (10,706,478)

28,932,656 100,002,842Other Assets:

Restricted cash 1,427,053 3,259,350Deposits on manufacturing equipment 3,582,883 8,770,693Patents, net of amortization of $28,248 and $17,186, respectively 308,785 259,439Other non-current assets 60,312 64,062

5,379,033 12,353,544Total Assets $ 61,424,505 $ 160,020,744

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable $ 658,605 $ 1,092,449Related party payables 229 54,037Accrued expenses 1,846,997 1,810,851Accrued property, plant and equipment 1,626,317 2,385,301Deferred contract revenue — 250,705Current portion of long-term debt 648,059 232,257Current portion of long-term debt—related party — 350,000

Total current liabilities 4,780,207 6,175,600Long-Term Debt 6,615,070 6,863,129Long-Term Debt—Related Party — 400,000Accrued Warranty Liability 26,660 15,900

Commitments and Contingencies (Notes 4, 12 & 19)Stockholders’ Equity:

Preferred stock, $0.0001 par value, 25,000,000 shares authorized, no shares outstanding — —Common stock, $0.0001 par value, 125,000,000 shares authorized; 39,345,459 and 32,265,587shares issued and outstanding at December 31, 2011 and 2010, respectively 3,935 3,226Additional paid-in capital 233,004,550 223,826,191Deficit accumulated during the development stage (183,006,936) (77,263,076)



Accumulated other comprehensive income (loss) 1,019 (226)Total stockholders’ equity 50,002,568 146,566,115

Total Liabilities and Stockholders’ Equity $ 61,424,505 $ 160,020,744

The accompanying notes are an integral part of these financial statements.

F - 2





STATEMENTS OF OPERATIONS

For the Years Ended December 31,

2011 2010 2009

For the Periodfrom inception(October 18,

2005) throughDecember 31,

2011

Revenues $ 3,949,911 $ 2,481,489 $ 1,464,346 $ 10,398,149Costs and Expenses

Research and development 24,121,766 24,354,224 15,508,209 79,685,683Selling, general and administrative 7,130,530 7,453,830 7,694,566 35,822,030Impairment loss 78,000,000 1,769,480 — 79,769,480

Total Costs and Expenses 109,252,296 33,577,534 23,202,775 195,277,193Loss from Operations (105,302,385) (31,096,045) (21,738,429) (184,879,044)Other Income/(Expense)

Interest expense (113,471) — — (1,200,764)Interest income 52,915 42,756 531,697 4,471,141Contract cancellation loss (590,774) — — (590,774)Realized gain on investments — 192 59,383 27,472Realized gain (loss) on forward contracts 63,915 — (1,128,326) (1,430,766)Unrealized gain on forward contracts — — 766,403 —Foreign currency transaction gain (loss) 145,940 (180,621) 586,555 595,799

(441,475) (137,673) 815,712 1,872,108Net Loss $ (105,743,860) $ (31,233,718) $ (20,922,717) $ (183,006,936)

Net Loss Per Share (Basic and diluted) $ (3.02) $ (1.14) $ (0.93)

Weighted Average Common SharesOutstanding (Basic and diluted) 34,985,914 27,506,007 22,432,803


F - 3





STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)For the Period from Inception (October 18, 2005) through December 31, 2011

Common Stock Preferred Stock

Shares Amount Shares Amount

AdditionalPaid-InCapital

AccumulatedDeficit

AccumulatedOther

ComprehensiveIncome

TotalStockholders’

EquityBalance at inception,October 18, 2005 — $ — — $ — $ — $ — $ — $ —Proceeds from sale ofcommon stock (11/05 @$.04 per share) 972,000 97 — — 38,783 — — 38,880Founders stock — — — — 933,120 — — 933,120Stock based compensation — — — — 26,004 — — 26,004Net loss — — — — — (1,207,234) — (1,207,234)Balance, December 31,2005 972,000 $ 97 — $ — $ 997,907 $ (1,207,234) $ — $ (209,230)

Transfer of assets athistorical cost (1/06 @$0.03 per share) 1,028,000 103 — — 31,097 — — 31,200Proceeds from IPO (7/06@ $5.50 per unit) 3,000,000 300 — — 16,499,700 — — 16,500,000IPO costs — — — — (2,392,071) — — (2,392,071)Stock issued to bridge loanlenders (7/06 @ $2.75 pershare) 290,894 29 — — 799,971 — — 800,000Exercise of stock options(9/06 & 12/06 @ $0.10 pershare) 31,200 3 — — 3,117 — — 3,120Stock based compensation — — — — 348,943 — — 348,943Net loss — — — — — (4,180,912) — (4,180,912)Balance, December 31,2006 5,322,094 $ 532 — $ — $ 16,288,664 $ (5,388,146) $ — $ 10,901,050

Exercise of stock options(1/07 -12/07 @ $.10) (7/07- 12/07 @ $4.25) (9/07 -12/07 @ $2.51 -$2.76) 169,963 17 — — 346,417 — — 346,434Conversion of Class Apublic warrants at $6.60 3,098,382 310 — — 20,449,011 — — 20,449,321Redemption of Class Apublic warrants at $0.25per share — — — — (48,128) — — (48,128)Conversion of Class Bpublic warrants at $11.00per share 11,000 1 — — 120,999 — — 121,000Proceeds from privateplacement: Common stock(3/07 @ $5.77 and 8/07 @$7.198) 2,534,462 254 — — 15,962,003 — — 15,962,257Proceeds from privateplacement: Class B publicwarrants (8/07 @ $1.91) — — — — 3,754,468 — — 3,754,468Private placement costs — — — — (75,807) — — (75,807)Exercise ofrepresentative’s warrants 300,000 30 — — 1,979,970 — — 1,980,000



(9/07 - 11/07 @ $6.60 perunit)Stock based compensation — — — — 1,734,879 — — 1,734,879Net loss — — — — — (6,503,419) — (6,503,419)Balance, December 31,2007 11,435,901 $ 1,144 — $ — $ 60,512,476 $ (11,891,565) $ — $ 48,622,055


F - 4





STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)(Continued)

For the Period from Inception (October 18, 2005) through December 31, 2011




AccumulatedDeficit

AccumulatedOther

ComprehensiveIncome


EquityBalance,December 31, 2007 11,435,901 $ 1,144 — $ — $ 60,512,476 $ (11,891,565) $ — $ 48,622,055Components ofcomprehensive loss

Unrealized gain oninvestments — — — — — — 331,068 331,068Net loss — — — — — (13,215,076) — (13,215,076)

Total comprehensive loss (12,884,008)

Exercise of stock options(1/08 - 12/08 @ $0.10,$2.73, $2.90 & $4.25) 133,137 13 — — 120,520 — — 120,533Conversion of Class Bpublic warrants at $11.00per share 98,800 10 — — 1,086,790 — — 1,086,800Proceeds from privateplacement: Common stock(3/08 @ $9.262 & 10/08@$6.176) 4,763,698 476 — — 36,647,217 — — 36,647,693Proceeds from privateplacement: Class B publicwarrants (3/08 @ $3.954) — — — — 6,681,884 — — 6,681,884Exercise ofrepresentative’s warrants(1/08 @ $6.60 per unit) 75,000 8 — — 494,992 — — 495,000Proceeds from shareholderunder Section 16(b) — — — — 148,109 — — 148,109Proceeds from secondarypublic offering (5/08 @$14.00) 4,370,000 437 — — 61,179,563 — — 61,180,000Costs of secondary publicoffering — — — — (4,361,358) — — (4,361,358)Issuance of RestrictedStock 69,846 7 — — (7) — — —Stock based compensation — — — — 1,881,399 — — 1,881,399Balance, December 31,2008 20,946,382 $ 2,095 — $ — $ 164,391,585 $ (25,106,641) $ 331,068 $ 139,618,107

Components ofcomprehensive loss

Unrealized loss oninvestments — — — — — — (334,080) (334,080)Net loss — — — — — (20,922,717) — (20,922,717)

Total comprehensive loss — (21,256,797)

Exercise of stock options(1/09 - 12/09 @ $0.10,$2.76 & $4.25) 105,169 10 — — 339,606 — — 339,616Proceeds from privateplacement: Common stock(10/09 @ $6.50) 769,230 77 — — 4,999,918 — — 4,999,995Proceeds from publicoffering (10/09 @ $6.50) 4,615,385 461 — — 29,999,542 — — 30,000,003



Costs of public offering — — — — (2,062,866) — — (2,062,866)Issuance of RestrictedStock 147,679 15 — — (15) — — —Stock based compensation — — — — 2,676,957 — — 2,676,957Balance, December 31,2009 26,583,845 $ 2,658 — $ — $ 200,344,727 $ (46,029,358) $ (3,012) $ 154,315,015


F - 5





STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)(Continued)

For the Period from Inception (October 18, 2005) through December 31, 2011




AccumulatedDeficit

AccumulatedOther

ComprehensiveIncome


EquityBalance, December 31,2009 26,583,845 $ 2,658 — $ — $ 200,344,727 $ (46,029,358) $ (3,012) $ 154,315,015Components ofcomprehensive lossUnrealized loss oninvestments — — — — — — 2,786 2,786

Net loss — — — — — (31,233,718) — (31,233,718)


Proceeds from publicoffering (11/11 @ $4.15) 5,250,000 525 — — 21,786,975 — — 21,787,500

Costs of public offering — — — — (1,409,937) — — (1,409,937)Exercise of stock options(1/10 - 12/10 @ $0.10,$2.90, $2.73, $2.76 &$3.17) 161,330 16 — — 390,985 — — 391,001Issuance of RestrictedStock 270,412 27 — — (27) — — —

Stock based compensation — — — — 2,713,468 — — 2,713,468Balance, December 31,2010 32,265,587 $ 3,226 — $ — $ 223,826,191 $ (77,263,076) $ (226) $ 146,566,115

Components ofcomprehensive lossUnrealized loss oninvestments — — — — — — 1,245 1,245

Net loss — — — — — (105,743,860) — (105,743,860)


Proceeds from privateoffering (8/11 @ $1.15) 6,400,000 640 — — 7,359,360 — — 7,360,000

Costs of private offering — — — — (123,973) — — (123,973)Net Proceeds from At-The-Market offering sales(10/11 - 11/11, $0.81 -$0.83) 386,050 39 — — 305,745 — — 305,784Exercise of stock options(1/11 - 9/11 @ $0.10) 57,000 6 — — 5,694 — — 5,700Issuance of CommonStock to service provider(5/11 @ $1.31) 45,000 5 — — 58,945 — — 58,950Issuance of RestrictedStock 191,822 19 — — (19) — — —

Stock based compensation — — — — 1,572,607 — — 1,572,607Balance, December 31,2011 39,345,459 $ 3,935 — $ — $ 233,004,550 $(183,006,936) $ 1,019 $ 50,002,568




F - 6





STATEMENTS OF CASH FLOWS

For the Years EndedDecember 31,

2011 2010 2009

For the Periodfrom inception

(October 18, 2005)through

December 31, 2011Operating Activities:

Net loss $ (105,743,860) $ (31,233,718) $ (20,922,717) $ (183,006,936)Adjustments to reconcile net loss to cash used in operatingactivities:Depreciation and amortization 7,541,962 6,690,601 2,582,706 18,347,024Stock based compensation 1,572,607 2,713,468 2,676,957 11,887,377Common stock issued for services 58,950 — — 58,950Foreign currency transaction gain (loss) (145,940) 180,621 (586,555) (595,799)Realized gain (loss) on forward contracts (63,915) — 1,128,326 1,430,766Unrealized gain on forward contracts — — (766,403) —Charge off of deferred financing costs to interest expense — — — 198,565Charge off of bridge loan discount to interest expense — — — 800,000Impairment loss 78,000,000 1,769,480 — 79,769,480Contract cancellation loss 590,774 — — 590,774Changes in operating assets and liabilities:

Accounts receivable 142,939 (351,180) 202,389 (342,087)Related party receivables 2,524 19,046 (21,570) —Inventories (592,289) (1,638,025) (238,809) (2,469,123)Prepaid expenses and other current assets 123,724 68,472 167,868 (386,624)Accounts payable (433,844) 399,893 427,143 658,605Related party payable (53,808) (141,917) (67,327) 229Accrued expenses (691,346) (341,024) 1,205,431 1,119,505Deferred contract revenue (250,705) 250,705 — —Warranty reserve 10,760 15,900 — 26,660Net cash used in operating activities (19,931,467) (21,597,678) (14,212,561) (71,912,634)

Investing Activities:

Purchases of available-for-sale-securities (28,215,821) (38,601,173) (143,989,514) (906,480,255)Maturities and sales of available for-sale securities 33,087,378 59,906,220 157,003,665 893,865,178Purchase of property, plant and equipment (9,681,565) (5,576,874) (7,049,400) (48,571,392)Deposits on manufacturing equipment — (5,388,160) (38,566,459) (79,883,404)Restricted cash for manufacturing equipment 1,832,297 (3,259,350) 2,300,000 (1,427,053)Patent activity costs (60,408) (98,084) (34,365) (312,076)Deposit on Building — — — (100,000)Net cash provided by (used in) investing activities (3,038,119) 6,982,579 (30,336,073) (142,909,002)

Financing Activities:

Proceeds from bridge loan financing — — — 1,600,000Repayment of bridge loan financing — — — (1,600,000)Payment of debt financing costs — — — (273,565)Payment of equity offering costs — (1,409,937) (2,062,866) (10,302,040)



Proceeds from debt — — 262,948 7,700,000Repayment of debt (582,257) (217,463) (187,151) (1,186,871)Repayment of debt—related party — (350,000) — (350,000)Proceeds from shareholder under Section 16(b) — — — 148,109Proceeds from issuance of stock and warrants 7,547,511 22,178,501 35,339,614 230,433,016Redemption of Class A warrants — — — (48,128)Net cash provided by financing activities 6,965,254 20,201,101 33,352,545 226,120,521

Net change in cash and cash equivalents (16,004,332) 5,586,002 (11,196,089) 11,298,885Cash and cash equivalents at beginning of period 27,303,217 21,717,215 32,913,304 —Cash and cash equivalents at end of period $ 11,298,885 $ 27,303,217 $ 21,717,215 $ 11,298,885

Supplemental Cash Flow Information:

Cash paid for interest $ 113,471 $ — $ — $ 113,895

Cash paid for income taxes $ — $ — $ — $ —

Non-Cash Transactions:

Note with ITN and related capital expenditures $ — $ 1,100,000 $ — $ 1,100,000

ITN initial contribution of assets for equity $ — $ — $ — $ 31,200


F - 7





NOTES TO FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION

Ascent Solar Technologies, Inc. (“Ascent” or “the Company”) was incorporated on October 18, 2005 from the separation by ITNEnergy Systems, Inc. (“ITN”) of its Advanced Photovoltaic Division and all of that division’s key personnel and core technologies. ITN,a private company incorporated in 1994, is an incubator dedicated to the development of thin-film, photovoltaic (“PV”), battery, fuelcell and nano technologies. Through its work on research and development contracts for private and governmental entities, ITNdeveloped proprietary processing and manufacturing know-how applicable to PV products generally, and to Copper-Indium-Gallium-diSelenide (“CIGS”) PV products in particular. ITN formed Ascent to commercialize its investment in CIGS PV technologies. InJanuary 2006, in exchange for 1,028,000 shares of common stock of Ascent, ITN assigned to Ascent certain CIGS PV technologies andtrade secrets and granted to Ascent a perpetual, exclusive, royalty-free worldwide license to use, in connection with the manufacture,development, marketing and commercialization of CIGS PV to produce solar power, certain of ITN’s existing and future proprietary andcontrol technologies that, although non-specific to CIGS PV, Ascent believes will be useful in its production of PV modules for itstarget markets. Upon receipt of the necessary government approvals and pursuant to novation in early 2007, ITN assigned government-funded research and development contracts to Ascent and also transferred the key personnel working on the contracts to Ascent. Today,ITN provides Ascent a limited amount of technical services.

NOTE 2. BASIS OF PRESENTATION

The Company’s activities to date have consisted substantially of raising capital, research and development, establishment anddevelopment of our production plant. Revenues to date have been primarily generated from the Company’s governmental research anddevelopment contracts and have not been significant. The Company’s planned principal operations to commercialize flexiblephotovoltaic ("PV") modules have commenced, but have generated limited revenue to date. Accordingly, the Company is considered tobe in the development stage and has provided additional disclosure of inception to date activity in our Statements of Operations,Statements of Stockholders’ Equity and Comprehensive Income (Loss) and Statements of Cash Flows.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents: The Company classifies all highly liquid debt securities purchased with an original maturity of three months orless to be cash equivalents. The Company maintains cash balances which may exceed federally insured limits. The Company does notbelieve that this results in significant credit risk.

Restricted Cash: The Company classifies all cash or cash items that are legally restricted to usage or withdrawal as restrictedcash. If such funds are to be used to acquire non-current assets or to liquidate long-term liabilities, they shall be classified as long-termin the Balance Sheets. Funds restricted for the payment of interest, current maturities of debt or other current liabilities shall beclassified as current.

Investments: The Company has classified its investments as “available-for-sale.” Such investments are carried at fair value, basedon quoted market prices with the unrealized holding gains and losses reported as “Accumulated other comprehensive income (loss)” inthe stockholders’ equity section of the Balance Sheets. Realized gains and losses on sales of securities are computed using the specificidentification method. The Company evaluates declines in market value for potential impairment. If the decline results in a value belowcost and is determined to be other than temporary, the investment is written down to its impaired value and a new cost basis isestablished.

Fair Value Estimates: The fair value of an asset or liability is the amount at which it could be exchanged or settled in a currenttransaction between willing parties. The Company has recorded investments at fair value and has classified them as Level 1, 2 or 3within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets orliabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices and other inputs that canbe corroborated by observable market data. Fair values determined by Level 3 inputs utilize unobservable data points for the asset orliability.

In addition to the items measured at fair value on a recurring basis, in conjunction with the significant impairment loss taken in2011, the Company also measured certain property, plant and equipment at fair value on a nonrecurring basis. These fair valuemeasurements rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets, as observable



inputs are not available. Accordingly, the Company determined that these fair value measurements reside primarily within Level 3 of thefair value hierarchy. The carrying value for cash and cash equivalents, restricted cash, accounts

F - 8



Table of Contents

receivable, accounts payable, accrued property plant, and equipment, accrued expenses and other assets and liabilities approximate theirfair values due to their short maturities.

Foreign Currencies: Bank account balances held in foreign currencies are translated to U.S. dollars utilizing the period endexchange rate. Gains or losses incurred in connection with the Company’s accounts held in foreign currency are recorded within foreigncurrency transaction gain (loss) in “Other Income/(Expense)” on the Statements of Operations.

Revenue Recognition: Revenue from governmental research and development contracts is generated under terms that are costplus fee or firm fixed price. Revenue from cost plus fee contracts is recognized as costs are incurred on the basis of direct costs plusallowable indirect costs and an allocable portion of the fixed fee. Revenue from firm fixed price contracts is recognized under thepercentage-of-completion method of accounting, with costs and estimated profits included in contract revenue as work is performed. Ifactual and estimated costs to complete a contract indicate a loss, provision is made currently for the loss anticipated on the contract.Revenue from commercial sales of flexible PV modules is recognized as modules are delivered and title has transferred to the customer.Product revenue through December 31, 2011 is included in research and development revenue as the Company is in the developmentstage and such revenues (totaling $538,005 for the year ended December 31, 2011) were generated from a limited number of customersas the product is being brought to market.

Shipping and Handling Costs: The Company classifies shipping and handling costs for solar modules shipped to our customersas a component of “Research and development costs” on the Company’s Statements of Operations. Customer payments of shipping andhandling costs are recorded as a component of “Revenues.”

Deferred Contract Revenue: Deferred contract revenue is generated from governmental research and development contracts. Theamount deferred represents billings in excess of costs incurred on firm fixed price deliverables. As of December 31, 2011 and 2010,deferred contract revenue was $0 and $250,705, respectively. Amounts classified in deferred contract revenue are expected to berecognized within one year of the Balance Sheet date.

Receivables and Allowance for Doubtful Accounts: Trade accounts receivable are recorded at the invoiced amount as the resultof transactions with customers. The Company maintains allowances for doubtful accounts for estimated losses resulting from theinability of its customers to make required payments. The Company estimates the collectability of accounts receivable using analysis ofhistorical bad debts, customer credit-worthiness and current economic trends. Necessary reserves are established on an account-by-account basis. Account balances are written off against the allowance in the period in which the Company determines that is it probablethat the receivable will not be recovered.

Product Warranties: The Company provides a limited warranty to the original purchaser of products against defective materialsand workmanship. The Company also guarantees modules will achieve and maintain the stated conversion efficiency rating. Warrantyaccruals are recorded at the time of sale and are estimated based upon product warranty terms, historical experience and analysis of peercompany product returns. The Company assesses the adequacy of its liabilities and makes adjustments as necessary based on known oranticipated warranty claims, or as new information becomes available.

Patents: At such time as the Company is awarded patents, patent costs are amortized on a straight-line basis over the legal life onthe patents, or over their estimated useful lives, whichever is shorter. As of December 31, 2011, the Company had $308,785 of netpatent costs, of which $103,595 represents costs net of amortization incurred for awarded patents, and the remaining $205,190represents costs incurred for patent applications to be filed. Amortization expense was $11,062 for the year ended December 31, 2011and $5,675 the year ended December 31, 2010.

Inventories: All inventories are stated at the lower of cost or market, with cost determined using the weighted average method.Elements of cost include raw material acquisition and conversion costs, an allocated portion of indirect production costs, inventorymaintenance costs and depreciation and amortization. When plant capacity is significantly underutilized, allocated costs included ininventories are based on a normal level of activity, with the excess costs charged to expense in the period incurred.

Inventory balances are frequently evaluated to ensure that they do not exceed net realizable value. The computation for netrealizable value takes into account many factors, including expected demand, product lifecycle and development plans, moduleefficiency, quality issues, obsolescence and others. If actual demand and market conditions are less favorable than those estimated bymanagement, additional inventory write-downs may be required. The Company’s inventories have a long life cycle and obsolescence isnot a significant factor in their valuation. During the year ended December 31, 2011, the Company recognized a lower of cost or marketadjustment on certain raw materials in the amount of $609,179. This expense is included within “Research and development” expense inthe Condensed Statements of Operations.



Property, Plant and Equipment: Property, plant and equipment are recorded at the original cost to the Company. Assets arebeing depreciated over estimated useful lives of three to forty years using the straight-line method, as presented in the table

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below, commencing when the asset is placed in service. Leasehold improvements are depreciated over the shorter of the remainder ofthe lease term or the life of the improvements. Upon retirement or disposal, the cost of the asset disposed of and the related accumulateddepreciation are removed from the accounts and any gain or loss is reflected in income. Expenditures for repairs and maintenance areexpensed as incurred.



Interest Capitalization: The Company capitalizes interest cost as part of the historical cost of acquiring or constructing certainassets during the period of time required to get the asset ready for its intended use. The Company capitalizes interest to the extent thatexpenditures to acquire or construct an asset have occurred and interest cost has been incurred.

Long-lived Assets: The Company analyzes its long-lived assets (property, plant and equipment) and definitive-lived intangibleassets (patents) for impairment, both individually and as a group, whenever events or changes in circumstances indicate that the carryingamount of the assets may not be recoverable. Events that might cause impairment would include significant current period operating orcash flow losses associated with the use of a long-lived asset or group of assets combined with a history of such losses, significantchanges in the manner of use of assets and significant negative industry or economic trends. During 2011 and 2010, the Companyincurred significant impairments of its manufacturing facilities and equipment in the amounts of $78.0 million and $1.8 million,respectively, based on estimates prepared by management, as well as a valuation analysis by an independent firm.

Net Loss per Common Share: Basic earnings per share include no dilution and are computed by dividing income available tocommon stockholders by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect thepotential of securities that could share in the earnings of the Company, similar to fully diluted earnings per share. Common stockequivalents consisting of IPO warrants (representative warrants), and stock options and unvested restricted stock outstanding as ofDecember 31, 2011 of approximately 1.7 million shares, have been omitted from loss per share because they are anti-dilutive. Net lossper common share was the same for both basic and diluted methods for the periods ended December 31, 2011, 2010 and 2009.

Research and Development Costs: Research and development costs are incurred during the process of researching anddeveloping new products and enhancing the Company’s manufacturing processes and consist primarily of personnel, materials, suppliesand equipment depreciation. The Company expenses these costs as incurred, except for certain costs related to inventoried rawmaterials, work-in-process and finished goods. The Company also incurs research and development expenses on its federal governmentresearch and development contracts, which the Company expenses as incurred.

Income Taxes: Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized fordeductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxabletemporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their taxbases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not thatsome portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of thechanges in tax laws and rates as of the date of enactment. Interest and penalties, if applicable, would be recorded in operations.

The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income taxreturns, as well as all open tax years (2007-2011) in these jurisdictions. The Company believes that its income tax filing positions anddeductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on theCompany’s financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have beenrecorded.

Share-Based Compensation: The Company measures and recognizes compensation expense for all share-based payment awardsmade to employees, officers, directors, and consultants based on estimated fair values. The company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model for option awards. The value of the portion of the award thatis ultimately expected to vest is recognized as expense over the requisite service period in the Company’s Statements of Operations.Share-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures areestimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. Forpurposes of determining estimated fair value of share-based payment awards on the



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date of grant the Company uses the Black-Scholes option-pricing model (“Black-Scholes Model”) for option awards. The Black-ScholesModel requires the input of highly subjective assumptions. Because the Company’s employee stock options may have characteristicssignificantly different from those of traded options, and because changes in the subjective input assumptions can materially affect thefair value estimate, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of theCompany’s employee stock options. Management will continue to assess the assumptions and methodologies used to calculate estimatedfair value of share-based compensation. Circumstances may change and additional data may become available over time, which result inchanges to these assumptions and methodologies, which could materially impact the Company’s fair value determination. The Companyestimates the fair value of its restricted stock awards as its stock price on the grant date.

The accounting guidance for share-based compensation may be subject to further interpretation and refinement over time. Thereare significant differences among option valuation models, and this may result in a lack of comparability with other companies that usedifferent models, methods and assumptions. If factors change and the Company employs different assumptions in the accounting forshare-based compensation in future periods, or if the Company decides to use a different valuation model, the compensation expensethat the Company records in the future may differ significantly from what it has recorded in the current period and could materiallyaffect its loss from operations, net loss and net loss per share.

Comprehensive Income (Loss): The Company’s comprehensive income (loss) consists of its net income (loss) and changes inunrealized gains or losses on available-for-sale investments, the impact of which has been excluded from net loss. The Companypresents its comprehensive income (loss) in the Statements of Stockholders’ Equity and Comprehensive Income (Loss). The Company’saccumulated other comprehensive income (loss) is presented as a component of equity in the Balance Sheets and consists of thecumulative amount of unrealized gains or losses on available-for-sale investments that have been incurred since the inception of theCompany’s business.

Reclassifications: Certain reclassifications have been made to the 2009 and 2010 financial information to conform to the 2011presentation. Such reclassifications had no effect on net losses for those periods.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expensesduring the reporting period. Actual results could differ from those estimates.

During the third quarter of 2011, the Company updated its estimates for service lives of certain manufacturing tools in order tobetter match depreciation expense with the periods these assets are expected to generate revenue. The change in services lives wasaccounted for prospectively as a change in accounting estimate effective July 1, 2011. The effect of this change on Net Loss and basicand diluted earnings per share was an increase of $931,117 and $0.02, respectively, for the year ended December 31, 2011.

Recent Accounting Pronouncements: In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement Topic (Topic 820):Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This AccountingStandards Update ("ASU") provides a consistent definition of fair value and sets forth common requirements for measurement of anddisclosure about fair value in accordance with U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04amends existing fair value measurement and disclosure requirements including application of highest and best use and valuationpremise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity, measuring the fairvalue of financial instruments that are valued within a portfolio and disclosures in measurement categorized within Level 3 of the fairvalue hierarchy. This ASU is effective on a prospective basis during interim and annual periods beginning after December 15, 2011 andearly application is not permitted. The Company does not expect the adoption of ASU 2011-04 will have a material impact on theCompany’s financial position, results of operations or cash flows.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ThisASU seeks to improve comparability, consistency and transparency of financial reporting with respect to comprehensive income byeliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity,among other amendments. The amendments of this ASU require all non-owner changes in stockholders’ equity be presented either in asingle continuous statement of comprehensive income or two separate but consecutive statements. This ASU is effective for fiscal yearsand interim periods beginning after December 15, 2011 and early adoption is permitted. The adoption of ASU 2011-05 will affect onlyfinancial statement presentation and will not impact the Company’s financial position, results of operations or cash flows.

NOTE 4. LIQUIDITY AND CONTINUED OPERATIONS

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As of December 31, 2011, the Company had approximately $23.9 million in cash and investments and working capital ofapproximately $22.3 million. An additional $1.4 million in cash is restricted for future payments on equipment. Through December 31,2011, sales of $0.3 million were completed through the At-The-Market facility. As discussed in Note 2, the Company is in thedevelopment stage and is currently incurring significant losses from operations as it works toward commercialization. The Companymade cash payments of approximately $9.7 million in the year ended December 31, 2011 for property, plant and equipment. TheCompany has remaining obligations for equipment purchases in the approximate amount of $4.1 million, of which approximately $1.6million is recorded in “Accrued property, plant and equipment”.

On March 31, 2011, the Company announced a change in strategy that, in the near term, will focus its solar module technology onapplications for emerging and specialty markets. Longer term the Company intends to participate in the building integrated market. Thechange in strategy resulted in a change in leadership and sizing the company to a new cost structure, primarily through the terminationof a portion of the Company’s workforce. The Company incurred a charge of approximately $450,000 in the quarter ended March 31,2011, comprised of severance costs. This charge has been expensed as “Research and development” and “Selling, general andadministrative” in the Statement of Operations in the amounts of approximately $72,000 and $378,000, respectively. Approximately$139,000 is recorded under "Accrued expenses" in the Balance Sheets as of December 31, 2011.

Due to recent significant adverse changes in market conditions, particularly the decreases in current and expected average sellingprices for PV modules, the Company concluded in the quarter ended June 30, 2011 that the carrying value of Property, Plant andEquipment and Deposits on manufacturing equipment may not be recoverable and a non-cash impairment charge of approximately$78.0 million was recorded. See Note 10. Impairment for additional information.

The Company has commenced limited production at its manufacturing facility. The Company does not expect that sales revenueand cash flows will be sufficient to support operations and cash requirements until actual full production capacity is achieved. Changesin the level of expected operating losses, the timing of planned capital expenditures or other factors may negatively impact cash flowsand reduce current cash and investments faster than anticipated. The Company will need to raise additional capital or financing in thefuture. There is no assurance that the Company will be able to raise additional capital on acceptable terms or at all. The Companyexpects its current cash balance to be sufficient to cover planned capital and operational expenditures through December 31, 2012 basedon currently known factors.

NOTE 5. RESTRICTED CASH

The Company established an irrevocable letter of credit with its bank in favor of an equipment vendor in the approximate amountof $3.0 million in February 2011. Approximately $1.6 million was paid in the quarter ending September 30, 2011 and the remainder ofapproximately $1.4 million was paid in the first quarter of 2012. The letter of credit is collateralized by an interest bearing account. Theamount is reflected as “Restricted cash” under “Other Assets” in the Balance Sheets.

NOTE 6. FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on themeasurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use ofunobservable inputs. The Company uses fair value hierarchy based on three levels of inputs, of which the first two are consideredobservable and the last unobservable, to measure fair value:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets orliabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observablemarket data for substantially the full term of the assets or liabilities.

• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of theassets or liabilities.

The following table represents the Company’s fair value hierarchy for its financial assets measured at fair value on a recurringbasis and its classification on the balance sheet as of December 31, 2011:

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Level 1 Level 2 Level 3 TotalCash

Equivalents Investments

Financial Assets:U.S. government securities $ — $ 4,381,313 $ — $ 4,381,313 $ — $ 4,381,313Municipal bonds — 3,185,886 — 3,185,886 — 3,185,886Money market funds 1,986,737 — — 1,986,737 1,986,737 —Corporate securities — 5,048,898 — 5,048,898 — 5,048,898

$ 1,986,737 $ 12,616,097 $ — $ 14,602,834 $ 1,986,737 $ 12,616,097

As of the balance sheet date, the Company held securities issued by U.S. government agencies (AA+/Aaa/AAA ratings),municipalities (AA/Aa1/Aa2/AA- ratings) and A-1/P-1 rated corporate notes. Approximately $12.6 million of these securities areclassified as Level 2 because the Company does not believe that it is possible to obtain a firm, up-to-date price of such securities from,for example, a major exchange; and as a result, the Company relies on its brokerage firm and investment manager to report its fair valueof such securities at the end of each month. Investments have not been transferred between levels.

In addition to the items measured at fair value on a recurring basis, the Company also measured certain assets at fair value on anonrecurring basis. As a result of an impairment analysis, at June 30, 2011 the Company recorded an impairment loss of $78.0 millionto write down its long-lived assets to fair value (See Note 10. "Impairment" for additional information). This write-down resulted in netassets of approximately $32.2 million being recorded at fair value as of June 30, 2011 . These fair value measurements rely primarily onCompany-specific inputs and the Company’s assumptions about the use of the assets, as observable inputs are not available.Accordingly, the Company determined that these fair value measurements reside primarily within Level 3 of the fair value hierarchy.

NOTE 7. INVESTMENTS

Securities held by the Company as of December 31, 2011 are classified as available-for-sale and consisted of U.S. governmentsecurities, municipal bonds and corporate securities. Such investments are carried at fair value, based on quoted market prices with theunrealized holding gains and losses reported as Accumulated other comprehensive income (loss) in the stockholders’ equity section ofthe Balance Sheets. Realized gains and losses on sales of securities are computed using the specific identification method. TheCompany evaluates declines in market value for potential impairment. If the decline results in a value below cost and is determined tobe other than temporary, the investment is written down to its impaired value and a new cost basis is established. A summary ofavailable-for-sale securities as of December 31, 2011 is as follows:

AmortizedCost

GrossUnrealized

Gains

GrossUnrealized

Losses

EstimatedFair

Value

U.S. government securities $ 4,379,892 $ 1,437 $ (16) $ 4,381,313Municipal bonds 3,186,050 68 (232) 3,185,886Corporate securities 5,049,136 4 (242) 5,048,898Total $ 12,615,078 $ 1,509 $ (490) $ 12,616,097

Contractual maturities of available-for-sale investments in the above schedule as of December 31, 2011 were all one year or less.

The Company typically invests in highly rated securities with low probabilities of default. The Company’s investment policyspecifies minimum investment grade criteria, types of acceptable investments, concentration limitations and duration guidelines.

All securities having an unrealized loss as of December 31, 2011 have been in a loss position for less than twelve months.

NOTE 8. TRADE RECEIVABLES

Trade receivables consist of amounts generated from government contracts and sales of PV modules. Accounts receivabletotaled $342,087 and $485,026 as of December 31, 2011 and 2010, respectively. Trade receivables were net of allowances for doubtfulaccounts of $5,839 and $0 as of December 31, 2011 and 2010, respectively.



Provisional Indirect Cost Rates - During 2010 and 2011, the Company billed the government under cost-based research anddevelopment contracts at provisional billing rates which permit the recovery of indirect costs. These rates are subject to audit on anannual basis by the government agencies’ cognizant audit agency. The cost audit will result in the negotiation and

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determination of the final indirect cost rates. In the opinion of management, re-determination of any cost-based contracts will not have amaterial effect on the Company’s financial position or results of operations.

NOTE 9. PROPERTY, PLANT AND EQUIPMENT

The following table summarizes property, plant and equipment as of December 31, 2011 and 2010:

As of December 31,

2011 2010

Building $ 5,762,935 $ 19,506,814Furniture, fixtures, computer hardware and computer software 339,820 1,151,745Manufacturing machinery and equipment 29,673,297 72,111,366Leasehold improvements 884,709 884,709Net depreciable property, plant and equipment 36,660,761 93,654,634Manufacturing machinery and equipment in progress 236,770 17,054,686

Property, plant and equipment 36,897,531 110,709,320Less: Accumulated depreciation and amortization (7,964,875) (10,706,478)

Net property, plant and equipment $ 28,932,656 $ 100,002,842

During the quarter ended June 30, 2011, an impairment charge in the amount of approximately $74.5 million was taken againstProperty, Plant and Equipment. This impairment, combined with a charge of approximately $3.5 million taken against Deposits onmanufacturing equipment, resulted in a total write-down of $78.0 million.. See Note 10. "Impairment" and Note 12. "Deposits onManufacturing Equipment."

Depreciation and amortization for the years ended December 31, 2011, 2010 and 2009 was $7,538,212, $6,681,176 and$2,580,044, respectively. Depreciation and amortization expense is recorded under “Research and development” expense and “Selling,general and administrative” expense in the Statements of Operations.

During the third quarter of 2011, the Company updated its estimates for service lives of certain manufacturing tools in order tobetter match depreciation expense with the periods these assets are expected to generate revenue. The change in services lives wasaccounted for prospectively as a change in accounting estimate effective July 1, 2011. The effect of this change on Net Loss and basicand diluted earnings per share was an increase of $931,117 and $0.02, respectively, for the year ended December 31, 2011. TheCompany incurred and capitalized interest costs related to its building loan as follows during the years ended December 31, 2011 and2010.


2011 2010

Interest cost incurred $ 465,103 $ 479,898Interest cost capitalized (351,632) (479,898)Interest expense, net $ 113,471 $ —

NOTE 10. IMPAIRMENT

The Company analyzes its long-lived assets for impairment, both individually and as a group, whenever events or changes incircumstances indicate that the carrying amount of the assets may not be recoverable. During the quarter ended June 30, 2011, as a resultof recent significant adverse changes in market conditions, particularly the decreases in current and expected average selling prices forPV modules, the Company concluded that the carrying value of Property, Plant and Equipment may not be recoverable. This analysisutilized projected selling prices and operating costs under alternative scenarios to arrive at total estimated undiscounted cash flows. As aresult of the analysis, the Company used discounted cash flows to calculate and record an impairment loss of $78.0 million in thecarrying value of Property, Plant and Equipment and Deposits on manufacturing equipment. The impairment loss was measured as theamount by which the carrying amount of the underlying assets exceeded fair value, as calculated using the expected present value



technique. Actual cash flows may differ from the forecasts used in the analysis. This analysis incorporated many different assumptionsand estimates which involve a high degree of judgment. These assumptions and estimates, which may change significantly in the future,have a substantial impact on the actual impairment loss recorded.

NOTE 11. INVENTORIES

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Inventories consisted of the following at December 31, 2011 and 2010:

As of December 31,

2011 2010

Raw materials $ 2,411,403 $ 1,468,425Work in process 20,812 317,468Finished goods 36,908 90,941Total $ 2,469,123 $ 1,876,834

During the year ended December 31, 2011, the Company recognized a lower of cost or market adjustment on certain raw materialsin the amount of $609,179. This expense is included within “Research and development” expense in the Condensed Statements ofOperations.

NOTE 12. DEPOSITS ON MANUFACTURING EQUIPMENT

As of December 31, 2011, deposits on manufacturing equipment related to the purchase of equipment not yet delivered wereapproximately $3.6 million. The equipment purchase agreements are conditional purchase obligations that have milestone-baseddeliverables, such as the Company’s acceptance of design requirements and successful installation and commissioning of the equipment.

NOTE 13. DEBT

In 2008, the Company acquired a manufacturing and office facility in Thornton, Colorado, for approximately $5.5 million. Thepurchase was financed by a promissory note, deed of trust and construction loan agreement (the “Construction Loan”) with theColorado Housing and Finance Authority (“CHFA”), which provided the Company borrowing availability of up to $7.5 million for thebuilding and building improvements. The Construction Loan terms required payments of interest at 6.6% on the outstanding balance. In2009, the Construction Loan was converted to a permanent loan pursuant to a Loan Modification Agreement between the Company andCHFA (the “Permanent Loan”). The Permanent Loan has an interest rate of 6.6% and the principal will be amortized through its term toJanuary 2028. The Company will incur a prepayment penalty if the Permanent Loan is prepaid prior to December 31, 2015. Further,pursuant to certain negative covenants in the Permanent Loan, the Company may not, among other things, without CHFA’s prior writtenconsent (which by the terms of the deed of trust is subject to a reasonableness requirement): create or incur additional indebtedness(other than obligations created or incurred in the ordinary course of business); merge or consolidate with any other entity; or make loansor advances to the Company’s officers, shareholders, directors or employees.

On January 7, 2010, the Company and ITN entered into an equipment purchase agreement whereby the Company purchased sevenresearch and development vacuum and deposition chambers for $1,100,000 from ITN. Payments in the amount of $350,000 wereremitted to ITN in January 2010 and January 2011. A final payment, without interest, in the amount of $400,000 was paid in January2012.

As of December 31, 2011, future principal payments on long-term debt are due as follows:

2012 $ 648,0592013 264,9352014 282,9602015 302,2102016 322,771Thereafter 5,442,194

$ 7,263,129

NOTE 14. DERIVATIVE FINANCIAL INSTRUMENTS

In prior years the Company was actively engaged in purchasing manufacturing equipment internationally and was exposed toforeign currency risk. In July 2008 and March 2009, the Company entered into fair value hedges utilizing forward contracts designed tomatch scheduled contractual payments to equipment suppliers which are denominated in Euros and Yen.



Although the hedging activity is designed to fix the dollar amount to be expended, the asset purchased is recorded at the spot ratein effect as of the date of the payment to the supplier. The difference between the spot rate and the forward rate has been reported asRealized gain (loss) on forward contracts. From time to time the Company holds foreign currency options to

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hedge against equipment payments to be remitted in foreign currencies. Derivative financial instruments are not used for speculative ortrading purposes.

At December 31, 2011, approximately $1.4 million included in Restricted cash was held in Euros. Accounts denominated inforeign currencies are held in the Company’s bank account for future payments to equipment suppliers. Changes in exchange ratesrelated to foreign currencies on deposit in the Company’s bank accounts are reflected as Foreign currency transaction gain (loss) in theStatements of Operations.

NOTE 15. STOCKHOLDERS’ EQUITY

At December 31, 2011, the Company’s authorized capital stock consists of 125,000,000 shares of common stock, $0.0001 parvalue, and 25,000,000 shares of preferred stock, $0.0001 par value. Each share of common stock has the right to one vote.

Preferred stock, $0.0001 par value per share, may be issued in classes or series. Designations, powers, preferences, rights,qualifications, limitations and restrictions are determined by the Company’s Board of Directors.

Initial Public Offering: The Company completed its initial public offering (“IPO”) of 3,000,000 units in 2006. Each unitconsisted of one share of common stock, one redeemable Class A warrant and two non-redeemable Class B warrants. The IPO price was$5.50 per unit. The net proceeds of the offering were approximately $14 million.

Class A warrants. In 2007, the Company announced that it intended to redeem its outstanding Class A warrants at $0.25 perwarrant pursuant to its terms. There were 3,290,894 Class A warrants issued in connection with the Company’s IPO. During theexercise period, 3,098,382 Class A warrants (94.1% of the total outstanding) were exercised for an equal number of shares of commonstock, and the Company received approximately $20 million in proceeds from the warrant exercises. The Class A warrant exerciseperiod ended July 10, 2011.

Class B warrants. The Class B warrants included in the units became exercisable in August 2006. The exercise price of a Class Bpublic warrant was $11.00. During 2008 and 2007, 98,800 and 11,000 Class B warrants, respectively were exercised resulting inproceeds to the Company of approximately $1.09 million and $121,000 respectively. The Class B warrant exercise period ended July10, 2011.

IPO warrants. Warrants to purchase 300,000 units at $6.60 were issued to underwriters of the Company’s IPO in July 2006(representative’s warrants). A unit consisted of one share of common stock, one Class A redeemable warrant and two Class B non-redeemable warrants. The proceeds from exercises of representative's warrants were approximately $2.0 million in 2007 and $0.5million in 2008. The representative's warrant exercise period ended July 10, 2011.

Private Placement of Securities: The Company completed a private placement of securities with Norsk Hydro Produksjon AS(“Norsk Hydro”) in March 2007. Norsk Hydro purchased 1,600,000 shares of the Company’s common stock (representing 23% of theCompany’s then outstanding common stock post transaction) for net proceeds of approximately $9.2 million.

In August 2007, Norsk Hydro acquired an additional 934,462 shares of the Company’s common stock and 1,965,690 Class Bwarrants through the exercise of an option previously granted to Norsk Hydro and approved by the Company's stockholders. Grossproceeds to the Company were $10.48 million, and reflected per share and per warrant purchase prices equal to the average of theclosing bids of each security, as reported by NASDAQ, for the five consecutive trading days preceding exercise (market price). Afteracquiring these additional shares, Norsk Hydro again held 23% of the then outstanding common shares, after its holdings were dilutedas the result of the redemption of Class A warrants and 23% of total outstanding Class B warrants. Pursuant to a second option that wasapproved by Ascent’s stockholders in June 2007, beginning December 13, 2007, Norsk Hydro was entitled to purchase additional sharesand Class B warrants up to a maximum of 35% of each class of security.

In March 2008, Norsk Hydro acquired an additional 2,341,897 shares of the Company’s common stock and 1,689,905 Class Bwarrants through the exercise of the second option previously granted to Norsk Hydro and approved by Ascent’s stockholders inJune 2007, resulting in Norsk Hydro ownership of approximately 35% of each class of security. Gross proceeds to the Company were$28.4 million, and reflected per share and per warrant market price. As a result of the Company’s Secondary Public Offering inMay 2008, Norsk Hydro’s holdings were diluted to approximately 27% of the then outstanding common stock.

In October 2008, Norsk Hydro acquired an additional 2,421,801 shares of the Company’s common stock. The purchase resulted ina return to Norsk Hydro’s ownership of approximately 35% of the Company’s then outstanding common stock. Gross proceeds to theCompany from the follow on investment were approximately $15 million.



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In September 2009, the Company sold to Norsk Hydro 769,230 restricted shares of the Company’s common stock forapproximately $5.0 million in a private placement at a per share price equal to $6.50. Norsk Hydro was granted demand and piggy-backregistration rights.

On August 12, 2011, the Company completed a strategic alliance with TFG Radiant Investment Group Ltd. and its affiliates(“TFG Radiant”). As part of this strategic alliance, TFG Radiant acquired 6,400,000 shares of the Company's common stock at a priceof $1.15 per share or $7,360,000 in the aggregate. The closing price of the Company's common stock on August 12, 2011 was $0.73. Inaddition, TFG Radiant received an option to acquire an additional 9,500,000 shares of the Company's common stock at an exercise priceof $1.55 per share. The option was approved by the Company's stockholders on October 27, 2011. This approval eliminated certainregistration rights which would have been otherwise available to TFG Radiant related to the 6,400,000 share purchase. TFG Radiantmay not exercise this option unless and until TFG Radiant meets a specified milestone associated with the construction of the first EastAsia FAB. This option expires on February 12, 2014.

On January 4, 2012, the Company announced that TFG Radiant had agreed to purchase 8,067,390 shares of the Company'scommon stock owned by Norsk Hydro for $4 million, or approximately $0.50 per share. The TFG Radiant purchase is expected to closeby March 31, 2012. Upon closing of the purchase, TFG Radiant's ownership would increase to approximately 39% of the Company'soutstanding Common Stock.

Secondary Public Offerings: In May 2008, the Company completed a secondary public offering of 4,370,000 shares of commonstock, which included 570,000 shares issued upon the underwriter’s exercise of their overallotment in full. The offering price of $14.00per share resulted in net proceeds of $56.8 million.

In October 2009, the Company completed a secondary offering of 4,615,385 shares of the Company’s common stock at a price of$6.50 per share.The net proceeds to the Company were approximately $27.9 million.

In November 2010, the Company completed a secondary offering of 5,250,000 shares of the Company’s common stock at a priceof $4.15 per share. The net proceeds to the Company were approximately $20.4 million.

On February 28, 2011, the Company entered into an At-The-Market Equity Offering Sales Agreement. Under this agreement theCompany issued and sold 386,050 shares of its common stock for gross proceeds of $315,270 during 2011. This agreement wasterminated on January 4, 2012.

On December 29, 2011, we filed a “shelf” Registration Statement on Form S-3 with the SEC. With the shelf registration,we may from time to time sell common stock, preferred stock, warrants or some combination in one or more offerings for up to$25.0 million. The registration became effective February 14, 2012. This shelf registration replaces the Company's prior shelfregistration statement which, in accordance with SEC rules, expired in early 2012.

On January 5, 2012, the Company entered into an At-The-Market Equity Offering Sales Agreement under which the Companymay issue and sell up to $5,000,000 of shares of its common stock from time to time. Sales of common stock, if any, will be made atmarket prices by any method that is deemed to be an “at the market” offering as defined in Rule 415 under the Securities Act, includingsales made directly on the NASDAQ stock exchange and any other trading market for the Company’s common stock, and sales to orthrough a market maker other than on an exchange. The aggregate compensation payable to the sales agent shall be equal to 3% of thegross sales price of the shares sold. As of March 22, 2012, 1,594,395 shares had been sold under this facility with net proceeds of$1,234,415.

NOTE 16. EQUITY PLANS AND SHARE-BASED COMPENSATION

Stock Option Plan: The Company’s 2005 Stock Option Plan, as amended (the “Stock Option Plan”) provides for the grant ofincentive or non-statutory stock options to the Company’s employees, directors and consultants. Upon recommendation of the Board ofDirectors, the stockholders approved increases in the total shares of common stock reserved for issuance under the Stock Option Plan atvarious times from 1,000,000 to 3,700,000 currently.

Restricted Stock Plan: The Company’s 2008 Restricted Stock Plan, as amended (the “Restricted Stock Plan”) was adopted by theBoard of Directors and was approved by the stockholders on July 1, 2008. The Restricted Stock Plan initially reserved up to 750,000shares of the Company’s common stock for restricted stock awards and restricted stock units to eligible employees, directors andconsultants of the Company. Upon recommendation of the Board of Directors, the stockholders approved an increase in the total sharesof common stock reserved for issuance under the Restricted Stock Plan from 750,000 to 1,550,000 shares.



The Stock Option Plan and the Restricted Stock Plan are administered by the Compensation Committee of the Board of Directors,which determines the terms of the option and share awards, including the exercise price, expiration date, vesting schedule and numberof shares. The term of any incentive stock option granted under the Stock Option Plan may not exceed ten

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years, or five years for options granted to an optionee owning more than 10% of the Company’s voting stock. The exercise price of anincentive stock option granted under the Option Plan must be equal to or greater than the fair market value of the shares of theCompany’s common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% ofthe Company’s voting stock must have an exercise price equal to or greater than 110% of the fair market value of the Company’scommon stock on the date the option is granted. The exercise price of a non-statutory option granted under the Option Plan must beequal to or greater than 85% of the fair market value of the shares of the Company’s common stock on the date the option is granted.

Grants Outside Existing Equity Plans: Prior to the adoption of the Restricted Stock Plan, the Board of Directors granted 40,000restricted stock awards in connection with an executive employment agreement. In July 2009, the Board of Directors granted aninducement award (as defined in NASDAQ Rule 5635(c) (4)) made outside of the existing Stock Option Plan for 200,000 stock options.

Share Based Compensation: The Company measures share-based compensation cost at the grant date based on the fair value of theaward and recognizes this cost as an expense over the grant recipients’ requisite service periods for all awards made to employees,officers, directors and consultants.

The share-based compensation expense recognized in the Statements of Operations for the years ended December 31, 2011, 2010and 2009:

For the years ended December 31,

2011 2010 2009

Share-based compensation cost included in:Research and development $ 302,101 $ 630,944 $ 764,062Selling, general and administrative 1,270,506 2,082,524 1,912,895Total share-based compensation cost $ 1,572,607 $ 2,713,468 $ 2,676,957

The following table presents share-based compensation expense by type of award for the years ended December 31, 2011, 2010and 2009:


2011 2010 2009

Type of Award:Stock Options $ 768,703 $ 1,252,732 $ 1,366,969Restricted Stock Units and Awards 803,904 1,460,736 1,309,988Total share-based compensation cost $ 1,572,607 $ 2,713,468 $ 2,676,957

Stock Options:

The Company recognized share-based compensation expense for stock options of approximately $769,000 (approximately$731,000 to officers, directors and employees, and approximately $38,000 to outside providers) for the year ended December 31,2011 related to stock option awards ultimately expected to vest and reduced for estimated forfeitures. Included in this amount isapproximately $236,000 in additional expense due to accelerated vesting, resulting from the severance agreement with the Company’sformer CEO, Dr. Farhad Moghadam. The weighted average estimated fair value of employee stock options granted for the yearended December 31, 2011 and 2010 was $1.49 and $2.81 per share, respectively. Fair value was calculated using the Black-ScholesModel with the following assumptions:


2011 2010 2009

Expected volatility 97.9% 100.8% 103.9-108.9%Risk free interest rate 2.1% 2.2% 1.9-2.7%Expected dividends — — —Expected life (in years) 6.25 6.03 5.7-6.5

Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate of return is based on the yield ofU.S. Treasury bonds with a maturity equal to the expected term of the award. Historical data is used to estimate forfeitures within the



Company’s valuation model. The Company’s expected life of stock option awards is derived from historical experience and representsthe period of time that awards are expected to be outstanding.

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As of December 31, 2011, total compensation cost related to non-vested stock options not yet recognized was approximately$1,067,000 which is expected to be recognized over a weighted average period of approximately 3.1 years. As of December 31, 2011,approximately 1,191,000 shares were vested or expected to vest in the future at a weighted average exercise price of $2.75. Asof December 31, 2011, approximately 1,596,000 shares remained available for future grants under the Option Plan.

The following schedule summarizes stock option activity for grants made within the Stock Option Plan and outside the plan(shares in thousands):

StockOptionShares

Stock OptionsWeightedAverage

Exercise Price

WeightedAverage

RemainingContractualLife in Years

AggregateIntrinsic

Value

Outstanding at December 31, 2008 1,092 $ 4.94 8.89 $ 894,198Granted 380 7.59Exercised (105) (3.23) $ 305,730Canceled (180) (6.21)Outstanding at December 31, 2009 1,187 $ 5.74 8.41 $ 1,847,222Granted 666 3.51Exercised (161) (2.42) $ 349,135Canceled (176) (5.52)Outstanding at December 31, 2010 1,516 $ 5.14 8.32 $ 527,463Granted 1,295 $ 1.88Exercised (57) $ (0.10) $ 149,007Canceled (1,308) $ 4.96Outstanding at December 31, 2011 1,446 $ 2.58 8.77 $ 4,437Exercisable at December 31, 2011 298 $ 4.94 6.98 $ 4,437

Restricted Stock:

In addition to the stock options discussed above, the Company recognized share-based compensation expense related to restrictedstock grants of approximately $804,000 for the year ended December 31, 2011. Included in this amount is approximately $40,000 inadditional expense due to the accelerated vesting, resulting from the severance agreement with the Company’s former CEO, Dr. FarhadMoghadam. The weighted average estimated fair value of restricted stock grants for the year ended December 31, 2011 and 2010 was$3.19 and $3.74, respectively.

Total unrecognized share-based compensation expense from unvested restricted stock as of December 31, 2011 was approximately$471,000 which is expected to be recognized over a weighted average period of approximately 2.5 years. As of December 31, 2011,approximately 205,000 shares were expected to vest in the future. As of December 31, 2011, approximately 669,000 shares remainedavailable for future grants under the Restricted Stock Plan.

The following table summarizes non-vested restricted stock and the related activity as of December 31, 2011 and for the yearsended December 31, 2011 and 2010 (shares in thousands):

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Shares

Weighted AverageGrant-DateFair-Value

Non-vested at January 1, 2010 200 $ 6.85Granted 325 3.74Vested (270)Forfeited (9) 4.37Non-vested at December 31, 2010 246 $ 5.48Granted 488 3.19Vested (212)Forfeited (281)Non-vested at December 31, 2011 241 $ 3.09

NOTE 17. INCOME TAXES

The Company records income taxes using the liability method. Under this method, deferred tax assets and liabilities are computedfor the expected future impact of temporary differences between the financial statement and income tax bases of assets and liabilitiesusing current income tax rates and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards.

At December 31, 2011, the Company had approximately $97,910,000 in net operating loss carryforwards that will expirebeginning in 2025. Approximately $2,800,000 of the net operating loss carryover is not included in the calculation of the deferred taxasset since it is related to excess tax deductions from the exercise of stock options and vested restricted stock. Under the InternalRevenue Code, the future utilization of net operating losses may be limited in certain circumstances where there is a significantownership change. There were no significant ownership changes in 2011 that would affect utilization of the Company’s net operatinglosses. Deferred income taxes reflect an estimate of the cumulative temporary differences recognized for financial reporting purposesfrom that recognized for income tax reporting purposes. At December 31, 2011 and 2010, the components of these temporarydifferences and the deferred tax asset were as follows:

As of December 31,

2011 2010

Deferred Tax AssetCurrent:

Accrued Expenses $ 60,000 $ 81,000Total Current 60,000 81,000

Non-current:Stock Based Compensation-Stock Options and Restricted Stock 1,064,000 1,100,000Tax effect of NOL carryforward 36,134,000 24,109,000Depreciation 30,016,000 880,000Amortization (117,000)Warranty reserve 10,000 6,000Start-up costs — 216,000Capital losses — 12,000Capitalized manufacturing costs & property taxes on P,P&E — 1,353,000

Total Non-current 67,107,000 27,676,000Net deferred tax asset 67,167,000 27,757,000

Less valuation allowance (67,167,000) (27,757,000)Net deferred tax asset $ — $ —



In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion orall of the deferred tax assets will be realized. Based upon the level of historical losses and projections of future taxable income over theperiods in which the deferred tax assets are deductible, a full valuation allowance has been provided due to the uncertainty surroundingthe timing and the amount of future revenues. The Company’s deferred tax valuation

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allowance of $67,167,000 reflected above is an increase of $39,410,000 from the valuation allowance reflected as of December 31,2010 of $27,757,000. The Company’s effective tax rate for the years ended December 31, 2011 and 2010 differs from the statutory ratedue to the following (expressed as a percentage of pre-tax income):

2011 2010

Federal statutory rate (35)% (35)%State statutory rate (3)% (3)%Permanent tax differences — % — %Other — % — %Increase in valuation allowance 38 % 38 %

— % — %

NOTE 18. RELATED PARTY TRANSACTIONS

Prior to January 1, 2011, ITN was considered a related party because ITN’s sole owner, Dr. Mohan Misra, was Chairman of theCompany’s Board of Directors and held various executive positions. Effective January 1, 2011, Dr. Misra was no longer a member ofthe Board of Directors or an executive of the Company and ITN is no longer considered a related party.

ITN was a related party during the twelve months ended December 31, 2010 and 2009. Included in Selling, general andadministrative expenses for the twelve months ended December 31, 2010 and 2009 was $390,824 and $815,196, respectively, ofexpenditures to ITN for facility sublease costs and administrative support expenses. Included in Research and development expense forthe twelve months ended December 31, 2010 and 2009 was $618,765 and $1,861,609, respectively, of expenditures to ITN forsupporting research and development and manufacturing activity, including charges for the use of research and development equipment.Related party payables of $54,037 as of December 31, 2010 represented costs remaining to be paid to ITN for these expenditures."Property, plant and equipment" as of December 31, 2010 includes $2,296,118 paid to ITN for the construction of manufacturing andresearch and development equipment and installation labor costs for the Company’s production lines.

On January 7, 2010, the Company and ITN entered into an equipment purchase agreement whereby the Company purchased sevenresearch and development vacuum and deposition chambers for $1,100,000 from ITN. Payments in the amount of $350,000 wereremitted to ITN in January 2010 and January 2011. A final payment, without interest, in the amount of $400,000 was paid inJanuary 2012.

NOTE 19. COMMITMENTS & CONTINGENCIES

Lease Agreement: On June 25, 2010, the Company entered into a lease agreement for the facility in Littleton, Colorado. Asof January 2012, the date the lease was extended, future minimum payments totaling $247,095 are due through December 31, 2012.

The Company is also responsible for payment of pass-through expenses such as property taxes, insurance, water and utilities. Rentexpense for the years ended December 31, 2011, 2010 and 2009 was $265,256, $295,769 and $232,259, respectively.

Litigation: On October 21, 2011, the Company was notified that a complaint claiming $3,048,701 for an investment banking fee(the “Lawsuit”) was filed by Jefferies & Company, Inc. (“Jefferies”) against the Company in New York State Supreme Court in theCounty of New York. In December 2010, Ascent and Jefferies entered into an engagement agreement (the “Fee Agreement”) pursuantto which Jefferies was hired to act as the Company's financial advisor in relation to certain potential transactions.

Ascent has paid Jefferies the fees it believes are owed under the Fee Agreement, which are a $100,000 retainer and approximately$49,000 of out-of-pocket expenses. Ascent believes that the Lawsuit is without merit. The Company intends to vigorously defend theLawsuit.

This proceeding is subject to the uncertainties inherent in any litigation. It is subject to many uncertainties and to outcomes that arenot predictable with assurance and that may not be known for an extended period of time. The Company records a liability in itsfinancial statements for costs related to claims, including settlements and judgments, where the Company has assessed that a loss isprobable and an amount can be reasonably estimated. It is not possible to predict the outcome for this legal proceeding. If the Lawsuit isdetermined adversely to the Company, the costs associated with this proceeding could have a material adverse effect on the Company'sresults of operations, financial position and/or cash flows of



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a future period.

NOTE 20. RETIREMENT PLAN

On July 1, 2006, the Company adopted a qualified 401(k) plan which provides retirement benefits for all of its eligible employees.Under the plan, employees become eligible to participate at the first entry date, provided that they are at least 21 years of age. Theparticipants may elect through salary reduction to contribute up to ceilings established in the Internal Revenue Code. The Company willmatch 100% of the first six percent of employee contributions. In addition, the Company may make discretionary contributions to thePlan as determined by the Board of Directors. Employees are immediately vested in all salary reduction contributions. Rights to benefitsprovided by the Company’s discretionary and matching contributions vest 100% after the first year of service for all employees hiredbefore January 1, 2010. For employees hired after December 31, 2009, matching contributions vest over a three-year period, one-thirdper year. Payments for 401(k) matching totaled $257,823, $366,006 and $276,315 for the years ended December 31, 2011, 2010 and2009 respectively. Payments for 401(k) matching are recorded under “Research and development" expense and “Selling, general andadministrative" expense in the Statements of Operations.

NOTE 21. SELECTED QUARTERLY FINANCIAL DATA (unaudited)

The following table presents selected unaudited Statements of Operations and Balance Sheet information for each of the quartersin the years ended December 31, 2011 and 2010 (in thousands, except per share data):

Selected Statements of Operations information:

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For the Quarter Ended

Year Ended December 31, 2011 December 31 September 30 June 30 March 31

Revenue $ 751 $ 989 $ 1,027 $ 1,184Research and Development Expense 4,681 4,145 6,701 8,595Selling, General and Administrative Expense 1,511 1,524 1,642 2,454Impairment Loss — — 78,000 —Loss from Operations (5,441) (4,680) (85,316) (9,865)Net Loss (5,557) (5,363) (85,169) (9,655)Basic and diluted loss per share $ (0.14) $ (0.15) $ (2.63) $ (0.30)

Selected Balance Sheet information:For the Quarter Ended


Current Assets $ 27,113 $ 31,094 $ 29,275 $ 35,532Total Assets 61,425 66,447 69,096 153,502Current Liabilities 4,780 4,780 9,423 8,951Working Capital 22,333 26,314 19,852 26,581Long-Term Obligations 6,642 6,704 6,763 6,823Stockholders’ Equity 50,003 54,963 52,910 137,728

Selected Statements of Operations information:For the Quarter Ended


Revenue $ 1,196 $ 623 $ 446 $ 216Research and Development Expense 7,450 6,418 5,928 4,558Selling, General and Administrative Expense 1,650 1,754 1,919 2,131Impairment Loss 1,769 — — —Loss from Operations (9,673) (7,549) (7,401) (6,473)Net Loss (9,757) (7,181) (7,692) (6,604)Basic and diluted loss per share $ (0.33) $ (0.27) $ (0.29) $ (0.25)

Selected Balance Sheet information:For the Quarter Ended



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INDEX TO EXHIBITS

Set forth below is a list of exhibits that are being filed or incorporated by reference into this Annual Report on Form 10-K:

ExhibitNo. Description

3.1 Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to our Registration Statement onForm SB-2 filed on January 23, 2006 (Reg. No. 333-131216))

3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011)

3.3 Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed onFebruary 17, 2009)

3.4 First Amendment to Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to our Quarterly Reporton Form 10-Q for the quarter ended September 30, 2009)

4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form SB-2filed on January 23, 2006 (Reg. No. 333-131216))

4.2 Form of Class B Warrant (incorporated by reference to Exhibit 4.3 to our Registration Statement on Form SB-2 filed onJanuary 23, 2006 (Reg. No. 333-131216))

4.3 Form of Warrant Agreement between the Company and Computershare Trust Company, Inc. (incorporated by reference toExhibit 4.5 to our Registration Statement on Form SB-2/A filed on April 20, 2006 (Reg. No. 333-131216))

4.4 Form of Representative’s Purchase Warrant (incorporated by reference to Exhibit 4.6 to our Registration Statement on FormSB-2/A filed on July 10, 2006 (Reg. No 333-131216))

4.5 Stockholders’ Agreement, dated March 13, 2007, between the Company and Norsk Hydro Produksjon AS (incorporated byreference to Exhibit 99.2 to our Current Report on Form 8-K filed on March 13, 2007)

4.6 Registration Rights Agreement, dated March 13, 2007, between the Company and Norsk Hydro Produksjon AS (incorporatedby reference to Exhibit 99.3 to our Current Report on Form 8-K filed on March 13, 2007)

4.7 Registration Rights Agreement, dated October 6, 2009, between the Company and Norsk Hydro Produksjon AS(incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on October 1, 2009)

10.1 Executive Employment Agreement, dated March 31, 2008, between the Company and Gary Gatchell (incorporated byreference to Exhibit 99.1 to our Current Report on Form 8-K filed on March 31, 2008)†

10.2 Amended and Restated Executive Employment Agreement, dated August 3, 2009, between the Company and FarhadMoghadam (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30,2009)†

10.3 Restricted Stock Unit Agreement, dated August 3, 2009, between the Company and Farhad Moghadam (incorporated byreference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009)†

10.4 Stock Option Agreement, dated August 3, 2009, between the Company and Farhad Moghadam (incorporated by reference toExhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009)†

10.5 Inducement Award Agreement, dated August 3, 2009, between the Company and Farhad Moghadam (incorporated byreference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009)†



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10.6 Restricted Stock Award Agreement, dated March 31, 2008, between the Company and Gary Gatchell (incorporated byreference to Exhibit 10.43 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008)†

10.7 Ascent Solar Technologies, Inc. Second Amended and Restated 2008 Restricted Stock Plan (including Form of RestrictedStock Award Agreement and Form of Restricted Stock Unit Agreement) (incorporated by reference to Exhibit 10.2 to ourCurrent Report on Form 8-K filed on June 17, 2010)†

10.8 Ascent Solar Technologies, Inc. Fourth Amended and Restated 2005 Stock Option Plan (incorporated by reference to Exhibit10.1 to our Current Report on Form 8-K filed on June 17, 2010)†

10.9 Securities Purchase Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc. (incorporatedby reference to Exhibit 10.1 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No.333-131216))CTR

10.10 Invention and Trade Secret Assignment Agreement, dated January 17, 2006, between the Company and ITN Energy Systems,Inc. (incorporated by reference to Exhibit 10.2 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg.No. 333-131216))CTR

10.11 Patent Application Assignment Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc.(incorporated by reference to Exhibit 10.3 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No.333-131216))

10.12 License Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc. (incorporated by referenceto Exhibit 10.4 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No. 333-131216))CTR

10.13 Service Center Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc., as amended(incorporated by reference to Exhibit 10.6 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No.333-131216))

10.14 Administrative Services Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc., asamended (incorporated by reference to Exhibit 10.8 to our Registration Statement on Form SB-2 filed on January 23, 2006(Reg. No. 333-131216))

10.15 Letter Agreement, dated November 23, 2005, among the Company, ITN Energy Systems, Inc. and the University ofDelaware (incorporated by reference to Exhibit 10.16 to our Registration Statement on Form SB-2/A filed on May 26, 2006(Reg. No. 333-131216))

10.16 License Agreement, dated November 21, 2006, between the Company and UD Technology Corporation (incorporated byreference to Exhibit 10.1 to our Current Report on Form 8-K filed on November 29, 2006)CTR

10.17 Novation Agreement, dated January 1, 2007, among the Company, ITN Energy Systems, Inc. and the United StatesGovernment (incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-KSB for the year ended December31, 2006)

10.18 Securities Purchase Agreement, dated March 13, 2007, between the Company and Norsk Hydro Produksjon AS (incorporatedby reference to Exhibit 99.1 to our Current Report on Form 8-K filed on March 13, 2007)

10.19 Amendment No. 1 to Securities Purchase Agreement, dated March 3, 2008, between the Company and Norsk HydroProduksjon AS (incorporated by reference to Exhibit 10.41 to our Annual Report on Form 10-K for the year ended December31, 2007)

10.20 Construction Loan Agreement, dated February 8, 2008, between the Company and the Colorado Housing and FinanceAuthority (incorporated by reference to Exhibit 10.37 to our Annual Report on Form 10-K for the year ended December 31,2007)



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10.21 Promissory Note, dated February 8, 2008, issued to the Colorado Housing and Finance Authority (incorporated by referenceto Exhibit 10.38 to our Annual Report on Form 10-K for the year ended December 31, 2007)

10.22 Loan Modification Agreement, dated January 29, 2009, between the Company and the Colorado Housing and FinanceAuthority (incorporated by reference to Exhibit 10.52 to our Annual Report on Form 10-K for the year ended December 31,2008)

10.23 Cooperation Agreement, dated December 18, 2007, between the Company and Norsk Hydro Produksjon AS (incorporated byreference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 19, 2007)

10.24 Photovoltaic Module Supply Agreement, dated September 21, 2009, between the Company and Turtle Energy LLC(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 23, 2009)CTR

10.25 Securities Purchase Agreement, dated September 29, 2009, between the Company and Norsk Hydro Produksjon AS(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 1, 2009)

10.26 Equipment Purchase Agreement, dated January 7, 2010, between the Company and ITN Energy Systems, Inc. (incorporatedby reference to Exhibit 10.46 to our Annual Report on Form 10-K for the year ended December 31, 2009)

10.27 At-the-Market Equity Offering Sales Agreement between the Company and Stifel, Nicolaus & Company, Incorporated datedFebruary 28, 2011 (incorporated by reference to Exhibit 10.39 to our Annual Report on Form 10-K filed February 28, 2011)

10.28 Executive Employment Agreement dated March 31, 2011 between the Company and Ron Eller (incorporated by reference toExhibit 10.1 to our Current Report on Form 8-K filed on April 6, 2011) †

10.29 Securities Purchase Agreement dated as of August 12, 2011 between TFG Radiant Investment Group Ltd. and the Company(incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed on August 15, 2011)

10.30 Stockholders Agreement dated as of August 12, 2011 between TFG Radiant Investment Group Ltd. and the Company(incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K filed on August 15, 2011)

10.31 Registration Rights Agreement dated as of August 12, 2011 between TFG Radiant Investment Group Ltd. and the Company(incorporated by reference to Exhibit 99.3 to our Current Report on Form 8-K filed on August 15, 2011)

10.32 Voting Agreement dated as of August 12, 2011 between TFG Radiant Investment Group Ltd. and Norsk Hydro ProduksjonAS (incorporated by reference to Exhibit 99.4 to our Current Report on Form 8-K filed on August 15, 2011)

10.33 Joint Development Agreement dated as of August 12, 2011 between TFG Radiant New-Energy Group Ltd. and the Company(incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended September 30,2011)CTR

10.34 At the Market Offering Sales Agreement dated as of January 5, 2012 between JonesTrading Institutional Services LLC andthe Company (incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed on January 5, 2012)

10.35 Amended and Restated Stockholders Agreement dated as of December 30, 2011 between TFG Radiant Investment GroupLtd. and the Company (incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K filed on January 5,2012)

10.36 Amended and Restated Registration Rights Agreement dated as of December 30, 2011 between TFG Radiant InvestmentGroup Ltd. and the Company (incorporated by reference to Exhibit 99.3 to our Current Report on Form 8-K filed on January5, 2012)



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23.1 Consent of Hein & Associates LLP*

31.1 Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002*

31.2 Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002*

32.1 Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002*

32.2 Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002*

* Filed herewith

CTR Portions of this exhibit have been omitted pursuant to a request for confidential treatment.

† Denotes management contract or compensatory plan or arrangement.



Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements of Ascent Solar Technologies, Inc. on Forms S-3 (Nos.333-131216, 333-137008, 333-147000, 333-149740, 333-150998, 333-156665 and 333-178821), and Forms S-8 (Nos. 333-142768,333-152642, 333-152643, 333-161794, 333-171355 and 333-171356), of our report dated March 22, 2012 relating to our audits of thefinancial statements which appear in this Annual Report on Form 10-K for the year ended December 31, 2011.

/S/ HEIN& ASSOCIATES LLP

Denver, ColoradoMarch 22, 2012



Exhibit 31.1


CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Victor Lee, certify that:

1. I have reviewed this Annual Report on Form 10-K of Ascent Solar Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessaryto make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internalcontrol over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditorsand the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting.

Date: March 22, 2012/s/ VICTOR LEE




Exhibit 31.2


CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gary Gatchell, certify that:

1. I have reviewed this Annual Report on Form 10-K of Ascent Solar Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessaryto make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internalcontrol over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditorsand the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting.

Date: March 22, 2012/s/ GARY GATCHELL

Gary GatchellChief Financial Officer



Exhibit 32.1


CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANTTO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Ascent Solar Technologies, Inc. (the “Company”) on Form 10-K for the period endedDecember 31, 2011 as filed with the Securities and Exchange Commission on the date therein specified (the “Report”), I, Victor Lee,President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002, that:

1 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2 The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.

Date: March 22, 2012/s/ VICTOR LEE




Exhibit 32.2


CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANTTO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Ascent Solar Technologies, Inc. (the “Company”) on Form 10-K for the period endedDecember 31, 2011 as filed with the Securities and Exchange Commission on the date therein specified (the “Report”), I, Gary Gatchell,Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2 The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.

Date: March 22, 2012/s/ GARY GATCHELL

Gary GatchellChief Financial Officer



12 Months EndedRelated Party Transactions Dec. 31, 2011Related Party Transaction,Due from (to) Related Party[Abstract]Related Party Transactions

RELATED PARTY TRANSACTIONS

Prior to January 1, 2011, ITN was considered a related party because ITN’s sole owner,Dr. Mohan Misra, was Chairman of the Company’s Board of Directors and held various executivepositions. Effective January 1, 2011, Dr. Misra was no longer a member of the Board of Directorsor an executive of the Company and ITN is no longer considered a related party.

ITN was a related party during the twelve months ended December 31, 2010 and 2009.Included in Selling, general and administrative expenses for the twelve monthsended December 31, 2010 and 2009 was $390,824 and $815,196, respectively, of expenditures toITN for facility sublease costs and administrative support expenses. Included in Research anddevelopment expense for the twelve months ended December 31, 2010 and 2009 was $618,765and $1,861,609, respectively, of expenditures to ITN for supporting research and developmentand manufacturing activity, including charges for the use of research and development equipment.Related party payables of $54,037 as of December 31, 2010 represented costs remaining to bepaid to ITN for these expenditures. "Property, plant and equipment" as of December 31, 2010includes $2,296,118 paid to ITN for the construction of manufacturing and research anddevelopment equipment and installation labor costs for the Company’s production lines.

On January 7, 2010, the Company and ITN entered into an equipment purchase agreementwhereby the Company purchased seven research and development vacuum and depositionchambers for $1,100,000 from ITN. Payments in the amount of $350,000 were remitted to ITN inJanuary 2010 and January 2011. A final payment, without interest, in the amount of $400,000was paid in January 2012.



12 Months EndedBasis of Presentation Dec. 31, 2011Basis Of Presentation[Abstract]Basis of Presentation

BASIS OF PRESENTATION

The Company’s activities to date have consisted substantially of raising capital, researchand development, establishment and development of our production plant. Revenues to date havebeen primarily generated from the Company’s governmental research and development contractsand have not been significant. The Company’s planned principal operations to commercializeflexible photovoltaic ("PV") modules have commenced, but have generated limited revenue todate. Accordingly, the Company is considered to be in the development stage and has providedadditional disclosure of inception to date activity in our Statements of Operations, Statements ofStockholders’ Equity and Comprehensive Income (Loss) and Statements of Cash Flows.



12 Months EndedSelected QuarterlyInformation Dec. 31, 2011

SELECTED QUARTERLYFINANCIAL DATA(unaudited) [Abstract]Quarterly Financial Information[Text Block] SELECTED QUARTERLY FINANCIAL DATA (unaudited)

The following table presents selected unaudited Statements of Operations and BalanceSheet information for each of the quarters in the years ended December 31, 2011 and 2010 (inthousands, except per share data):

Selected Statements of Operations information:



Revenue $ 751 $ 989 $ 1,027 $ 1,184Research and DevelopmentExpense 4,681 4,145 6,701 8,595Selling, General andAdministrative Expense 1,511 1,524 1,642 2,454Impairment Loss — — 78,000 —Loss from Operations (5,441) (4,680) (85,316) (9,865)Net Loss (5,557) (5,363) (85,169) (9,655)Basic and diluted loss per share $ (0.14) $ (0.15) $ (2.63) $ (0.30)

Selected Balance Sheetinformation:




Selected Statements ofOperations information:



Revenue $ 1,196 $ 623 $ 446 $ 216Research and DevelopmentExpense 7,450 6,418 5,928 4,558Selling, General andAdministrative Expense 1,650 1,754 1,919 2,131Impairment Loss 1,769 — — —Loss from Operations (9,673) (7,549) (7,401) (6,473)Net Loss (9,757) (7,181) (7,692) (6,604)Basic and diluted loss per share $ (0.33) $ (0.27) $ (0.29) $ (0.25)

Selected Balance Sheetinformation:



12 Months EndedOrganization Dec. 31, 2011Organization [Abstract]Organization

ORGANIZATION

Ascent Solar Technologies, Inc. (“Ascent” or “the Company”) was incorporated onOctober 18, 2005 from the separation by ITN Energy Systems, Inc. (“ITN”) of its AdvancedPhotovoltaic Division and all of that division’s key personnel and core technologies. ITN, aprivate company incorporated in 1994, is an incubator dedicated to the development of thin-film,photovoltaic (“PV”), battery, fuel cell and nano technologies. Through its work on research anddevelopment contracts for private and governmental entities, ITN developed proprietaryprocessing and manufacturing know-how applicable to PV products generally, and to Copper-Indium-Gallium-diSelenide (“CIGS”) PV products in particular. ITN formed Ascent tocommercialize its investment in CIGS PV technologies. In January 2006, in exchange for1,028,000 shares of common stock of Ascent, ITN assigned to Ascent certain CIGS PVtechnologies and trade secrets and granted to Ascent a perpetual, exclusive, royalty-freeworldwide license to use, in connection with the manufacture, development, marketing andcommercialization of CIGS PV to produce solar power, certain of ITN’s existing and futureproprietary and control technologies that, although non-specific to CIGS PV, Ascent believes willbe useful in its production of PV modules for its target markets. Upon receipt of the necessarygovernment approvals and pursuant to novation in early 2007, ITN assigned government-fundedresearch and development contracts to Ascent and also transferred the key personnel working onthe contracts to Ascent. Today, ITN provides Ascent a limited amount of technical services.



Balance Sheets (USD $) Dec. 31, 2011 Dec. 31,2010

ASSETSCash and cash equivalents $ 11,298,885 $

27,303,217Investments 12,616,097 17,486,409Trade receivables, net of allowance for doubtful accounts of $5,839 and $0,respectively 342,087 485,026

Related party receivables 0 2,524Inventories 2,469,123 1,876,834Prepaid expenses and other current assets 386,624 510,348Total current assets 27,112,816 47,664,358Property, Plant and Equipment: 36,897,531 110,709,320Less accumulated depreciation and amortization (7,964,875) (10,706,478)Property, Plant and Equipment, Net 28,932,656 100,002,842Other Assets:Restricted cash 1,427,053 3,259,350Deposits on manufacturing equipment 3,582,883 8,770,693Patents, net of amortization of $28,248 and $17,186, respectively 308,785 259,439Other non-current assets 60,312 64,062Total Other Assets 5,379,033 12,353,544Total Assets 61,424,505 160,020,744LIABILITIES AND STOCKHOLDERS' EQUITYAccounts payable 658,605 1,092,449Related party payables 229 54,037Accrued expenses 1,846,997 1,810,851Accrued property, plant and equipment 1,626,317 2,385,301Deferred contract revenue 0 250,705Current portion of long-term debt 648,059 232,257Current portion of long-term debt - related party 0 350,000Total current liabilities 4,780,207 6,175,600Long-Term Debt 6,615,070 6,863,129Long-Term Debt - Related Party 0 400,000Accrued Warranty Liability 26,660 15,900Commitments and Contingencies (Notes 4, 12 & 19)Stockholders' Equity:Preferred stock, $0.0001 par value, 25,000,000 shares authorized, no sharesoutstanding 0 0

Common stock, $0.0001 par value, 125,000,000 shares authorized; 39,345,459 and32,265,587 shares issued and outstanding at December 31, 2011 and 2010,respectively

3,935 3,226

Additional paid in capital 233,004,550 223,826,191Deficit accumulated during the development stage (183,006,936) (77,263,076)Accumulated other comprehensive income (loss) 1,019 (226)



Total stockholders' equity 50,002,568 146,566,115Total Liabilities and Stockholders' Equity $ 61,424,505 $

160,020,744



1 Months Ended 3 Months Ended 6 MonthsEnded

9MonthsEnded

12MonthsEnded

12 Months Ended 4 Months EndedStatements of Stockholders'Equity and Comprehensive

Income (Loss)(Parenthetical) (USD $)

Nov.30,

2011

Oct.31,

2011

Aug.31,

2011

May31,

2011

Nov.30,

2010

Oct.31,

2009

Oct.31,

2008

May31,

2008

Mar.31,

2008

Jan.31,

2008

Aug.31,

2007

Mar.31,

2007

Dec.31,

2006

Sep.30,

2006

Jul.31,

2006

Jan.31,

2006

Dec.31,

2010

Sep.30,

2010

Jun.30,

2010

Mar.31,

2010

Jun.30,

2009

Mar.31,

2009

Dec.31,

2008

Sep.30,

2008

Jun.30,

2008

Mar.31,

2008

Nov.30,

2007

Dec.31,

2009

Dec.31,

2007

Sep.30,

2011

Dec.31,

2010

Dec.31,

2007

Nov.30,

2005

Dec. 31,2007

Class Awarrants[Member]

Dec. 31,2008

Class Bwarrants[Member]

Dec. 31,2007

Class Bwarrants[Member]

Dec. 31,2007

Maximum[Member]

Dec. 31,2007

Minimum[Member]

Stock option exercised, pershare

$0.10

$0.10

$2.76

$2.73

$2.90

$0.10

$2.76

$0.10

$4.25

$2.90

$2.73

$0.10

$4.25

$4.25 $ 0.10 $

3.17$0.10 $ 2.76 $ 2.51

Proceeds from sale of commonstock, per share

$0.04

Transfer of assets at historicalcost, per share

$0.03

Proceeds from IPO, per unit $5.50

Stock issued to bridge loanlenders, per share

$2.75

Conversion of public warrants,per share $ 6.60 $ 11.00 $ 11.00

Redemption of publicwarrants, per share

$0.25

Common stock under privateplacement, per share

$6.50

$6.176

$9.262

$7.198

$5.77

Public warrants under privateplacement, per share

$3.954

$1.91

Exercise of representative'swarrants, per unit 6.60 6.60

Proceeds from secondarypublic offering, per share

$14.00

Proceeds from public offering,per share

$4.15

$6.50

Issuance of commons stock toservice provider, per share

$1.31

Proceeds from privateoffering, per share

$1.15

At-the-Market offering pershare

$0.83

$0.81



12 Months EndedStockholders' Equity Dec. 31, 2011Stockholders' Equity Note[Abstract]Stockholders' Equity

STOCKHOLDERS’ EQUITY

At December 31, 2011, the Company’s authorized capital stock consistsof 125,000,000 shares of common stock, $0.0001 par value, and 25,000,000 shares of preferredstock, $0.0001 par value. Each share of common stock has the right to one vote.

Preferred stock, $0.0001 par value per share, may be issued in classes or series.Designations, powers, preferences, rights, qualifications, limitations and restrictions aredetermined by the Company’s Board of Directors.

Initial Public Offering: The Company completed its initial public offering (“IPO”) of3,000,000 units in 2006. Each unit consisted of one share of common stock, one redeemableClass A warrant and two non-redeemable Class B warrants. The IPO price was $5.50 per unit.The net proceeds of the offering were approximately $14 million.

Class A warrants. In 2007, the Company announced that it intended to redeem itsoutstanding Class A warrants at $0.25 per warrant pursuant to its terms. There were 3,290,894Class A warrants issued in connection with the Company’s IPO. During the exercise period,3,098,382 Class A warrants (94.1% of the total outstanding) were exercised for an equal numberof shares of common stock, and the Company received approximately $20 million in proceedsfrom the warrant exercises. The Class A warrant exercise period ended July 10, 2011.

Class B warrants. The Class B warrants included in the units became exercisable in August2006. The exercise price of a Class B public warrant was $11.00. During 2008 and 2007, 98,800and 11,000 Class B warrants, respectively were exercised resulting in proceeds to the Companyof approximately $1.09 million and $121,000 respectively. The Class B warrant exercise periodended July 10, 2011.

IPO warrants. Warrants to purchase 300,000 units at $6.60 were issued to underwriters ofthe Company’s IPO in July 2006 (representative’s warrants). A unit consisted of one share ofcommon stock, one Class A redeemable warrant and two Class B non-redeemable warrants. Theproceeds from exercises of representative's warrants were approximately $2.0 million in 2007 and$0.5 million in 2008. The representative's warrant exercise period ended July 10, 2011.

Private Placement of Securities: The Company completed a private placement ofsecurities with Norsk Hydro Produksjon AS (“Norsk Hydro”) in March 2007. Norsk Hydropurchased 1,600,000 shares of the Company’s common stock (representing 23% of theCompany’s then outstanding common stock post transaction) for net proceeds of approximately$9.2 million.

In August 2007, Norsk Hydro acquired an additional 934,462 shares of the Company’scommon stock and 1,965,690 Class B warrants through the exercise of an option previouslygranted to Norsk Hydro and approved by the Company's stockholders. Gross proceeds to theCompany were $10.48 million, and reflected per share and per warrant purchase prices equal tothe average of the closing bids of each security, as reported by NASDAQ, for the five consecutivetrading days preceding exercise (market price). After acquiring these additional shares, NorskHydro again held 23% of the then outstanding common shares, after its holdings were diluted asthe result of the redemption of Class A warrants and 23% of total outstanding Class B warrants.Pursuant to a second option that was approved by Ascent’s stockholders in June 2007, beginningDecember 13, 2007, Norsk Hydro was entitled to purchase additional shares and Class B warrantsup to a maximum of 35% of each class of security.

In March 2008, Norsk Hydro acquired an additional 2,341,897 shares of the Company’scommon stock and 1,689,905 Class B warrants through the exercise of the second option



previously granted to Norsk Hydro and approved by Ascent’s stockholders in June 2007,resulting in Norsk Hydro ownership of approximately 35% of each class of security. Grossproceeds to the Company were $28.4 million, and reflected per share and per warrant marketprice. As a result of the Company’s Secondary Public Offering in May 2008, Norsk Hydro’sholdings were diluted to approximately 27% of the then outstanding common stock.

In October 2008, Norsk Hydro acquired an additional 2,421,801 shares of the Company’scommon stock. The purchase resulted in a return to Norsk Hydro’s ownership of approximately35% of the Company’s then outstanding common stock. Gross proceeds to the Company from thefollow on investment were approximately $15 million.

In September 2009, the Company sold to Norsk Hydro 769,230 restricted shares of theCompany’s common stock for approximately $5.0 million in a private placement at a per shareprice equal to $6.50. Norsk Hydro was granted demand and piggy-back registration rights.

On August 12, 2011, the Company completed a strategic alliance with TFG RadiantInvestment Group Ltd. and its affiliates (“TFG Radiant”). As part of this strategic alliance, TFGRadiant acquired 6,400,000 shares of the Company's common stock at a price of $1.15 per shareor $7,360,000 in the aggregate. The closing price of the Company's common stock on August 12,2011 was $0.73. In addition, TFG Radiant received an option to acquire an additional 9,500,000shares of the Company's common stock at an exercise price of $1.55 per share. The option wasapproved by the Company's stockholders on October 27, 2011. This approval eliminated certainregistration rights which would have been otherwise available to TFG Radiant related to the6,400,000 share purchase. TFG Radiant may not exercise this option unless and until TFGRadiant meets a specified milestone associated with the construction of the first East Asia FAB.This option expires on February 12, 2014.

On January 4, 2012, the Company announced that TFG Radiant had agreed to purchase8,067,390 shares of the Company's common stock owned by Norsk Hydro for $4 million, orapproximately $0.50 per share. The TFG Radiant purchase is expected to close by March 31,2012. Upon closing of the purchase, TFG Radiant's ownership would increase to approximately39% of the Company's outstanding Common Stock.

Secondary Public Offerings: In May 2008, the Company completed a secondary publicoffering of 4,370,000 shares of common stock, which included 570,000 shares issued upon theunderwriter’s exercise of their overallotment in full. The offering price of $14.00 per shareresulted in net proceeds of $56.8 million.

In October 2009, the Company completed a secondary offering of 4,615,385 shares of theCompany’s common stock at a price of $6.50 per share.The net proceeds to the Company wereapproximately $27.9 million.

In November 2010, the Company completed a secondary offering of 5,250,000 shares of theCompany’s common stock at a price of $4.15 per share. The net proceeds to the Company wereapproximately $20.4 million.

On February 28, 2011, the Company entered into an At-The-Market Equity Offering SalesAgreement. Under this agreement the Company issued and sold 386,050 shares of its commonstock for gross proceeds of $315,270 during 2011. This agreement was terminated on January 4,2012.

On December 29, 2011, we filed a “shelf” Registration Statement on Form S-3 with theSEC. With the shelf registration,we may from time to time sell common stock, preferred stock, warrants or some combination inone or more offerings for up to$25.0 million. The registration became effective February 14, 2012. This shelf registrationreplaces the Company's prior shelf registration statement which, in accordance with SEC rules,expired in early 2012.



On January 5, 2012, the Company entered into an At-The-Market Equity Offering SalesAgreement under which the Company may issue and sell up to $5,000,000 of shares of itscommon stock from time to time. Sales of common stock, if any, will be made at market prices byany method that is deemed to be an “at the market” offering as defined in Rule 415 under theSecurities Act, including sales made directly on the NASDAQ stock exchange and any othertrading market for the Company’s common stock, and sales to or through a market maker otherthan on an exchange. The aggregate compensation payable to the sales agent shall be equal to 3%of the gross sales price of the shares sold. As of March 22, 2012, 1,594,395 shares had been soldunder this facility with net proceeds of $1,234,415.



12 Months EndedIncome Taxes Dec. 31, 2011INCOME TAXES [Abstract]Income Tax Disclosure [TextBlock] INCOME TAXES

The Company records income taxes using the liability method. Under this method, deferredtax assets and liabilities are computed for the expected future impact of temporary differencesbetween the financial statement and income tax bases of assets and liabilities using currentincome tax rates and for the expected future tax benefit to be derived from tax loss and tax creditcarryforwards.

At December 31, 2011, the Company had approximately $97,910,000 in net operating losscarryforwards that will expire beginning in 2025. Approximately $2,800,000 of the net operatingloss carryover is not included in the calculation of the deferred tax asset since it is related toexcess tax deductions from the exercise of stock options and vested restricted stock. Under theInternal Revenue Code, the future utilization of net operating losses may be limited in certaincircumstances where there is a significant ownership change. There were no significantownership changes in 2011 that would affect utilization of the Company’s net operating losses.Deferred income taxes reflect an estimate of the cumulative temporary differences recognized forfinancial reporting purposes from that recognized for income tax reporting purposes. AtDecember 31, 2011 and 2010, the components of these temporary differences and the deferred taxasset were as follows:

As of December 31,

2011 2010

Deferred Tax AssetCurrent:

Accrued Expenses $ 60,000 $ 81,000Total Current 60,000 81,000

Non-current:Stock Based Compensation-Stock Options and RestrictedStock 1,064,000 1,100,000Tax effect of NOL carryforward 36,134,000 24,109,000Depreciation 30,016,000 880,000Amortization (117,000)Warranty reserve 10,000 6,000Start-up costs — 216,000Capital losses — 12,000Capitalized manufacturing costs & property taxes on P,P&E — 1,353,000

Total Non-current 67,107,000 27,676,000Net deferred tax asset 67,167,000 27,757,000

Less valuation allowance (67,167,000) (27,757,000)Net deferred tax asset $ — $ —

In assessing the realizability of deferred tax assets, management considers whether it ismore likely than not that some portion or all of the deferred tax assets will be realized. Basedupon the level of historical losses and projections of future taxable income over the periods inwhich the deferred tax assets are deductible, a full valuation allowance has been provided due tothe uncertainty surrounding the timing and the amount of future revenues. The Company’sdeferred tax valuation allowance of $67,167,000 reflected above is an increase of $39,410,000from the valuation allowance reflected as of December 31, 2010 of $27,757,000. The Company’s



effective tax rate for the years ended December 31, 2011 and 2010 differs from the statutory ratedue to the following (expressed as a percentage of pre-tax income):

2011 2010

Federal statutory rate (35)% (35)%State statutory rate (3)% (3)%Permanent tax differences — % — %Other — % — %Increase in valuation allowance 38 % 38 %

— % — %



12 Months Ended 74 MonthsEndedStatements of Cash Flows

(USD $) Dec. 31, 2011 Dec. 31,2010 Dec. 31, 2009 Dec. 31, 2011

Operating Activities:Net loss $

(105,743,860)$(31,233,718)

$(20,922,717)

$(183,006,936)

Adjustments to reconcile net loss to cash used inoperating activities:Depreciation and amortization 7,541,962 6,690,601 2,582,706 18,347,024Stock based compensation 1,572,607 2,713,468 2,676,957 11,887,377Common stock issued for services 58,950 0 0 58,950Realized gain (loss) on forward contracts (63,915) 0 1,128,326 1,430,766Unrealized gain on forward contracts 0 0 (766,403) 0Foreign currency transaction gain (loss) (145,940) 180,621 (586,555) (595,799)Charge off of deferred financing costs to interestexpense 0 0 0 198,565

Charge off of bridge loan discount to interest expense 0 0 0 800,000Impairment loss 78,000,000 1,769,480 0 79,769,480Contract cancellation loss 590,774 0 0 590,774Changes in operating assets and liabilities:Accounts receivable 142,939 (351,180) 202,389 (342,087)Related party receivables 2,524 19,046 (21,570) 0Inventories (592,289) (1,638,025) (238,809) (2,469,123)Prepaid expenses and other current assets 123,724 68,472 167,868 (386,624)Accounts payable (433,844) 399,893 427,143 658,605Related party payable (53,808) (141,917) (67,327) 229Accrued expenses (691,346) (341,024) 1,205,431 1,119,505Deferred revenue (250,705) 250,705 0 0Warranty reserve 10,760 15,900 0 26,660Net cash used in operating activities (19,931,467) (21,597,678) (14,212,561) (71,912,634)Investing Activities:Purchases of available-for-sale-securities (28,215,821) (38,601,173) (143,989,514) (906,480,255)Maturities and sales of available-for-sale securities 33,087,378 59,906,220 157,003,665 893,865,178Purchase of property, plant and equipment (9,681,565) (5,576,874) (7,049,400) (48,571,392)Deposits on manufacturing equipment 0 (5,388,160) (38,566,459) (79,883,404)Restricted cash for manufacturing equipment 1,832,297 (3,259,350) 2,300,000 (1,427,053)Patent activity costs (60,408) (98,084) (34,365) (312,076)Deposit on building 0 0 0 (100,000)Net cash provided by (used in) investing activities (3,038,119) 6,982,579 (30,336,073) (142,909,002)Financing Activities:Proceeds from bridge loan financing 0 0 0 1,600,000Repayment of bridge loan financing 0 0 0 (1,600,000)Payment of debt financing costs 0 0 0 (273,565)



Payment of equity offering costs 0 (1,409,937) (2,062,866) (10,302,040)Proceeds from debt 0 0 262,948 7,700,000Repayment of debt (582,257) (217,463) (187,151) (1,186,871)Repayment of debt-related party 0 (350,000) 0 (350,000)Proceeds from shareholder under Section 16(b) 0 0 0 148,109Proceeds from issuance of stock and warrants 7,547,511 22,178,501 35,339,614 230,433,016Redemption of Class A warrants 0 0 0 (48,128)Net cash provided by (used in) financing activities 6,965,254 20,201,101 33,352,545 226,120,521Net change in cash and cash equivalents (16,004,332) 5,586,002 (11,196,089) 11,298,885Cash and cash equivalents at beginning of period 27,303,217 21,717,215 32,913,304 0Cash and cash equivalents at end of period 11,298,885 27,303,217 21,717,215 11,298,885Supplemental Cash Flow Information:Cash paid for interest 113,471 0 0 113,895Cash paid for income taxes 0 0 0 0Non-Cash Transactions:ITN initial contribution of assets for equity 0 0 0 31,200Note with ITN and related capital expenditures $ 0 $ 1,100,000 $ 0 $ 1,100,000



Balance Sheets(Parenthetical) (USD $) Dec. 31, 2011Dec. 31, 2010

Statement of Financial Position [Abstract]Trade receivables, allowance for doubtful accounts $ 5,839 $ 0Patents, amortization $ 28,248 $ 17,186Preferred stock, par value $ 0.0001 $ 0.0001Preferred stock, shares authorized 25,000,000 25,000,000Preferred stock, shares outstanding 0 0Common stock, par value $ 0.0001 $ 0.0001Common stock, shares authorized 125,000,000 75,000,000Common stock, shares issued 39,345,459 32,265,587Common stock, shares outstanding 39,345,459 32,265,587



12 Months EndedImpairment Dec. 31, 2011Asset Impairment Charges[Abstract]Impairment

IMPAIRMENT

The Company analyzes its long-lived assets for impairment, both individually and as agroup, whenever events or changes in circumstances indicate that the carrying amount of theassets may not be recoverable. During the quarter ended June 30, 2011, as a result of recentsignificant adverse changes in market conditions, particularly the decreases in current andexpected average selling prices for PV modules, the Company concluded that the carrying valueof Property, Plant and Equipment may not be recoverable. This analysis utilized projected sellingprices and operating costs under alternative scenarios to arrive at total estimated undiscountedcash flows. As a result of the analysis, the Company used discounted cash flows to calculate andrecord an impairment loss of $78.0 million in the carrying value of Property, Plant and Equipmentand Deposits on manufacturing equipment. The impairment loss was measured as the amount bywhich the carrying amount of the underlying assets exceeded fair value, as calculated using theexpected present value technique. Actual cash flows may differ from the forecasts used in theanalysis. This analysis incorporated many different assumptions and estimates which involve ahigh degree of judgment. These assumptions and estimates, which may change significantly inthe future, have a substantial impact on the actual impairment loss recorded.



12 Months EndedDocument and EntityInformation (USD $) Dec. 31, 2011 Mar. 15, 2012Jun. 30, 2011

Document And Entity Information [Abstract]Document Type 10-KAmendment Flag falseDocument Period End Date Dec. 31, 2011Document Fiscal Year Focus 2011Document Fiscal Period Focus FYEntity Registrant Name Ascent Solar Technologies, Inc.Entity Central Index Key 0001350102Current Fiscal Year End Date --12-31Entity Filer Category Smaller Reporting CompanyEntity Common Stock, Shares Outstanding 40,957,854Entity Well-known Seasoned Issuer NoEntity Voluntary Filers NoEntity Current Reporting Status YesEntity Public Float $ 23,057,638



12 Months EndedInventories Dec. 31, 2011Inventory, Gross [Abstract]Inventories

INVENTORIES

Inventories consisted of the following at December 31, 2011 and 2010:

As of December 31,

2011 2010

Raw materials $ 2,411,403 $ 1,468,425Work in process 20,812 317,468Finished goods 36,908 90,941Total $ 2,469,123 $ 1,876,834

During the year ended December 31, 2011, the Company recognized a lower of cost ormarket adjustment on certain raw materials in the amount of $609,179. This expense is includedwithin “Research and development” expense in the Condensed Statements of Operations.



12 Months Ended 74 MonthsEndedStatements of Operations

(USD $) Dec. 31, 2011 Dec. 31,2010

Dec. 31,2009 Dec. 31, 2011

Revenues $ 3,949,911 $ 2,481,489 $ 1,464,346 $ 10,398,149Costs and ExpensesResearch and development 24,121,766 24,354,224 15,508,209 79,685,683Selling, general and administrative 7,130,530 7,453,830 7,694,566 35,822,030Impairment loss 78,000,000 1,769,480 0 79,769,480Total Costs and Expenses 109,252,296 33,577,534 23,202,775 195,277,193Loss from Operations (105,302,385) (31,096,045) (21,738,429) (184,879,044)Other Income/(Expense)Interest expense (113,471) 0 0 (1,200,764)Interest income 52,915 42,756 531,697 4,471,141Contract cancellation loss (590,774) 0 0 (590,774)Realized gain on investments 0 192 59,383 27,472Realized gain (loss) on forward contracts 63,915 0 (1,128,326) (1,430,766)Unrealized gain on forward contracts 0 0 766,403 0Foreign currency transaction gain (loss) 145,940 (180,621) 586,555 595,799Total Other Income/(Expense) (441,475) (137,673) 815,712 1,872,108Net Loss $

(105,743,860)$(31,233,718)

$(20,922,717)

$(183,006,936)

Net Loss Per Share (Basic and diluted) $ (3.02) $ (1.14) $ (0.93)Weighted Average Common Shares Outstanding (Basicand diluted) 34,985,914 27,506,007 22,432,803



12 Months EndedRestricted Cash Dec. 31, 2011Restricted Cash andInvestments [Abstract]Restricted Cash

RESTRICTED CASH

The Company established an irrevocable letter of credit with its bank in favor of anequipment vendor in the approximate amount of $3.0 million in February 2011. Approximately$1.6 million was paid in the quarter ending September 30, 2011 and the remainder ofapproximately $1.4 million was paid in the first quarter of 2012. The letter of credit iscollateralized by an interest bearing account. The amount is reflected as “Restricted cash” under“Other Assets” in the Balance Sheets.



12 Months EndedLiquidity and ContinuedOperations Dec. 31, 2011

Liquidity and ContinuedOperationsLiquidity and ContinuedOperations LIQUIDITY AND CONTINUED OPERATIONS

As of December 31, 2011, the Company had approximately $23.9 million in cash andinvestments and working capital of approximately $22.3 million. An additional $1.4 million incash is restricted for future payments on equipment. Through December 31, 2011, sales of $0.3million were completed through the At-The-Market facility. As discussed in Note 2, the Companyis in the development stage and is currently incurring significant losses from operations as itworks toward commercialization. The Company made cash payments of approximately $9.7million in the year ended December 31, 2011 for property, plant and equipment. The Companyhas remaining obligations for equipment purchases in the approximate amount of $4.1 million, ofwhich approximately $1.6 million is recorded in “Accrued property, plant and equipment”.

On March 31, 2011, the Company announced a change in strategy that, in the near term,will focus its solar module technology on applications for emerging and specialty markets.Longer term the Company intends to participate in the building integrated market. The change instrategy resulted in a change in leadership and sizing the company to a new cost structure,primarily through the termination of a portion of the Company’s workforce. The Companyincurred a charge of approximately $450,000 in the quarter ended March 31, 2011, comprised ofseverance costs. This charge has been expensed as “Research and development” and “Selling,general and administrative” in the Statement of Operations in the amounts of approximately$72,000 and $378,000, respectively. Approximately $139,000 is recorded under "Accruedexpenses" in the Balance Sheets as of December 31, 2011.

Due to recent significant adverse changes in market conditions, particularly the decreases incurrent and expected average selling prices for PV modules, the Company concluded in thequarter ended June 30, 2011 that the carrying value of Property, Plant and Equipment andDeposits on manufacturing equipment may not be recoverable and a non-cash impairment chargeof approximately $78.0 million was recorded. See Note 10. Impairment for additionalinformation.

The Company has commenced limited production at its manufacturing facility. TheCompany does not expect that sales revenue and cash flows will be sufficient to supportoperations and cash requirements until actual full production capacity is achieved. Changes in thelevel of expected operating losses, the timing of planned capital expenditures or other factors maynegatively impact cash flows and reduce current cash and investments faster than anticipated. TheCompany will need to raise additional capital or financing in the future. There is no assurancethat the Company will be able to raise additional capital on acceptable terms or at all. TheCompany expects its current cash balance to be sufficient to cover planned capital and operationalexpenditures through December 31, 2012 based on currently known factors.



12 Months EndedEquity Plans and Share-Based Compensation Dec. 31, 2011

Equity Plans And ShareBased Compensation[Abstract]Equity Plans and Share-BasedCompensation EQUITY PLANS AND SHARE-BASED COMPENSATION

Stock Option Plan: The Company’s 2005 Stock Option Plan, as amended (the “StockOption Plan”) provides for the grant of incentive or non-statutory stock options to the Company’semployees, directors and consultants. Upon recommendation of the Board of Directors, thestockholders approved increases in the total shares of common stock reserved for issuance underthe Stock Option Plan at various times from 1,000,000 to 3,700,000 currently.

Restricted Stock Plan: The Company’s 2008 Restricted Stock Plan, as amended (the“Restricted Stock Plan”) was adopted by the Board of Directors and was approved by thestockholders on July 1, 2008. The Restricted Stock Plan initially reserved up to 750,000 shares ofthe Company’s common stock for restricted stock awards and restricted stock units to eligibleemployees, directors and consultants of the Company. Upon recommendation of the Board ofDirectors, the stockholders approved an increase in the total shares of common stock reserved forissuance under the Restricted Stock Plan from 750,000 to 1,550,000 shares.

The Stock Option Plan and the Restricted Stock Plan are administered by the CompensationCommittee of the Board of Directors, which determines the terms of the option and share awards,including the exercise price, expiration date, vesting schedule and number of shares. The term ofany incentive stock option granted under the Stock Option Plan may not exceed ten years, or fiveyears for options granted to an optionee owning more than 10% of the Company’s voting stock.The exercise price of an incentive stock option granted under the Option Plan must be equal to orgreater than the fair market value of the shares of the Company’s common stock on the date theoption is granted. An incentive stock option granted to an optionee owning more than 10% of theCompany’s voting stock must have an exercise price equal to or greater than 110% of the fairmarket value of the Company’s common stock on the date the option is granted. The exerciseprice of a non-statutory option granted under the Option Plan must be equal to or greater than85% of the fair market value of the shares of the Company’s common stock on the date the optionis granted.

Grants Outside Existing Equity Plans: Prior to the adoption of the Restricted Stock Plan, theBoard of Directors granted 40,000 restricted stock awards in connection with an executiveemployment agreement. In July 2009, the Board of Directors granted an inducement award (asdefined in NASDAQ Rule 5635(c) (4)) made outside of the existing Stock Option Plan for200,000 stock options.

Share Based Compensation: The Company measures share-based compensation cost at thegrant date based on the fair value of the award and recognizes this cost as an expense over thegrant recipients’ requisite service periods for all awards made to employees, officers, directorsand consultants.

The share-based compensation expense recognized in the Statements of Operations for theyears ended December 31, 2011, 2010 and 2009:


2011 2010 2009

Share-based compensation cost included in:Research and development $ 302,101 $ 630,944 $ 764,062Selling, general and administrative 1,270,506 2,082,524 1,912,895Total share-based compensation cost $ 1,572,607 $ 2,713,468 $ 2,676,957



The following table presents share-based compensation expense by type of award for theyears ended December 31, 2011, 2010 and 2009:


2011 2010 2009

Type of Award:Stock Options $ 768,703 $ 1,252,732 $ 1,366,969Restricted Stock Units and Awards 803,904 1,460,736 1,309,988Total share-based compensation cost $ 1,572,607 $ 2,713,468 $ 2,676,957

Stock Options:

The Company recognized share-based compensation expense for stock options ofapproximately $769,000 (approximately $731,000 to officers, directors and employees, andapproximately $38,000 to outside providers) for the year ended December 31, 2011 related tostock option awards ultimately expected to vest and reduced for estimated forfeitures. Included inthis amount is approximately $236,000 in additional expense due to accelerated vesting, resultingfrom the severance agreement with the Company’s former CEO, Dr. Farhad Moghadam. Theweighted average estimated fair value of employee stock options granted for the yearended December 31, 2011 and 2010 was $1.49 and $2.81 per share, respectively. Fair value wascalculated using the Black-Scholes Model with the following assumptions:


2011 2010 2009

Expected volatility 97.9% 100.8% 103.9-108.9%Risk free interest rate 2.1% 2.2% 1.9-2.7%Expected dividends — — —Expected life (in years) 6.25 6.03 5.7-6.5

Expected volatility is based on the historical volatility of the Company’s stock. The risk-freerate of return is based on the yield of U.S. Treasury bonds with a maturity equal to the expectedterm of the award. Historical data is used to estimate forfeitures within the Company’s valuationmodel. The Company’s expected life of stock option awards is derived from historical experienceand represents the period of time that awards are expected to be outstanding.

As of December 31, 2011, total compensation cost related to non-vested stock options notyet recognized was approximately $1,067,000 which is expected to be recognized over aweighted average period of approximately 3.1 years. As of December 31, 2011, approximately1,191,000 shares were vested or expected to vest in the future at a weighted average exerciseprice of $2.75. As of December 31, 2011, approximately 1,596,000 shares remained available forfuture grants under the Option Plan.

The following schedule summarizes stock option activity for grants made within the StockOption Plan and outside the plan (shares in thousands):

StockOptionShares

Stock OptionsWeightedAverage

Exercise Price

WeightedAverage

RemainingContractualLife in Years

AggregateIntrinsic

Value

Outstanding at December 31, 2008 1,092 $ 4.94 8.89 $ 894,198Granted 380 7.59Exercised (105) (3.23) $ 305,730Canceled (180) (6.21)Outstanding at December 31, 2009 1,187 $ 5.74 8.41 $ 1,847,222



Granted 666 3.51Exercised (161) (2.42) $ 349,135Canceled (176) (5.52)Outstanding at December 31, 2010 1,516 $ 5.14 8.32 $ 527,463Granted 1,295 $ 1.88Exercised (57) $ (0.10) $ 149,007Canceled (1,308) $ 4.96Outstanding at December 31, 2011 1,446 $ 2.58 8.77 $ 4,437Exercisable at December 31, 2011 298 $ 4.94 6.98 $ 4,437

Restricted Stock:

In addition to the stock options discussed above, the Company recognized share-basedcompensation expense related to restricted stock grants of approximately $804,000 for the yearended December 31, 2011. Included in this amount is approximately $40,000 in additionalexpense due to the accelerated vesting, resulting from the severance agreement with theCompany’s former CEO, Dr. Farhad Moghadam. The weighted average estimated fair value ofrestricted stock grants for the year ended December 31, 2011 and 2010 was $3.19 and $3.74,respectively.

Total unrecognized share-based compensation expense from unvested restricted stock asof December 31, 2011 was approximately $471,000 which is expected to be recognized over aweighted average period of approximately 2.5 years. As of December 31, 2011, approximately205,000 shares were expected to vest in the future. As of December 31, 2011, approximately669,000 shares remained available for future grants under the Restricted Stock Plan.

The following table summarizes non-vested restricted stock and the related activity as ofDecember 31, 2011 and for the years ended December 31, 2011 and 2010 (shares in thousands):

Shares

WeightedAverage

Grant-DateFair-Value

Non-vested at January 1, 2010 200 $ 6.85Granted 325 3.74Vested (270)Forfeited (9) 4.37Non-vested at December 31, 2010 246 $ 5.48Granted 488 3.19Vested (212)Forfeited (281)Non-vested at December 31, 2011 241 $ 3.09



12 Months EndedDeposits on ManufacturingEquipment Dec. 31, 2011

Other Assets [Abstract]Deposits on ManufacturingEquipment DEPOSITS ON MANUFACTURING EQUIPMENT

As of December 31, 2011, deposits on manufacturing equipment related to the purchase ofequipment not yet delivered were approximately $3.6 million. The equipment purchaseagreements are conditional purchase obligations that have milestone-based deliverables, such asthe Company’s acceptance of design requirements and successful installation and commissioningof the equipment.



12 Months EndedTrade Receivables Dec. 31, 2011Receivables, Net, Current[Abstract]Trade Receivables

TRADE RECEIVABLES

Trade receivables consist of amounts generated from government contracts and sales of PVmodules. Accounts receivable totaled $342,087 and $485,026 as of December 31, 2011 and 2010,respectively. Trade receivables were net of allowances for doubtful accounts of $5,839 and $0 asof December 31, 2011 and 2010, respectively.

Provisional Indirect Cost Rates - During 2010 and 2011, the Company billed thegovernment under cost-based research and development contracts at provisional billing rateswhich permit the recovery of indirect costs. These rates are subject to audit on an annual basis bythe government agencies’ cognizant audit agency. The cost audit will result in the negotiation anddetermination of the final indirect cost rates. In the opinion of management, re-determination ofany cost-based contracts will not have a material effect on the Company’s financial position orresults of operations.



12 Months EndedFair Value Measurements Dec. 31, 2011Fair Value MeasurementsFair Value Measurements

FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid totransfer a liability (an exit price) in the principal or most advantageous market for the asset orliability in an orderly transaction between market participants on the measurement date. Valuationtechniques used to measure fair value must maximize the use of observable inputs and minimizethe use of unobservable inputs. The Company uses fair value hierarchy based on three levels ofinputs, of which the first two are considered observable and the last unobservable, to measure fairvalue:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, suchas quoted prices for similar assets or liabilities; quoted prices in markets that are notactive; or other inputs that are observable or can be corroborated by observable marketdata for substantially the full term of the assets or liabilities.

• Level 3 - Unobservable inputs that are supported by little or no market activity and thatare significant to the fair value of the assets or liabilities.

The following table represents the Company’s fair value hierarchy for its financial assetsmeasured at fair value on a recurring basis and its classification on the balance sheet asof December 31, 2011:

Level 1 Level 2 Level 3 TotalCash

Equivalents Investments

FinancialAssets:U.S.governmentsecurities $ — $ 4,381,313 $ — $ 4,381,313 $ — $ 4,381,313Municipalbonds — 3,185,886 — 3,185,886 — 3,185,886Moneymarket funds 1,986,737 — — 1,986,737 1,986,737 —Corporatesecurities — 5,048,898 — 5,048,898 — 5,048,898

$1,986,737 $12,616,097 $ — $14,602,834 $1,986,737 $12,616,097

As of the balance sheet date, the Company held securities issued by U.S. governmentagencies (AA+/Aaa/AAA ratings), municipalities (AA/Aa1/Aa2/AA- ratings) and A-1/P-1 ratedcorporate notes. Approximately $12.6 million of these securities are classified as Level 2 becausethe Company does not believe that it is possible to obtain a firm, up-to-date price of suchsecurities from, for example, a major exchange; and as a result, the Company relies on itsbrokerage firm and investment manager to report its fair value of such securities at the end ofeach month. Investments have not been transferred between levels.

In addition to the items measured at fair value on a recurring basis, the Company alsomeasured certain assets at fair value on a nonrecurring basis. As a result of an impairmentanalysis, at June 30, 2011 the Company recorded an impairment loss of $78.0 million to writedown its long-lived assets to fair value (See Note 10. "Impairment" for additional information).This write-down resulted in net assets of approximately $32.2 million being recorded at fair value



as of June 30, 2011 . These fair value measurements rely primarily on Company-specific inputsand the Company’s assumptions about the use of the assets, as observable inputs are notavailable. Accordingly, the Company determined that these fair value measurements resideprimarily within Level 3 of the fair value hierarchy.



12 Months EndedInvestments Dec. 31, 2011Investments [Abstract]Investments

INVESTMENTS

Securities held by the Company as of December 31, 2011 are classified as available-for-saleand consisted of U.S. government securities, municipal bonds and corporate securities. Suchinvestments are carried at fair value, based on quoted market prices with the unrealized holdinggains and losses reported as Accumulated other comprehensive income (loss) in the stockholders’equity section of the Balance Sheets. Realized gains and losses on sales of securities arecomputed using the specific identification method. The Company evaluates declines in marketvalue for potential impairment. If the decline results in a value below cost and is determined to beother than temporary, the investment is written down to its impaired value and a new cost basis isestablished. A summary of available-for-sale securities as of December 31, 2011 is as follows:

AmortizedCost

GrossUnrealized

Gains

GrossUnrealized

Losses

EstimatedFair

Value

U.S. government securities $ 4,379,892 $ 1,437 $ (16) $ 4,381,313Municipal bonds 3,186,050 68 (232) 3,185,886Corporate securities 5,049,136 4 (242) 5,048,898Total $12,615,078 $ 1,509 $ (490) $12,616,097

Contractual maturities of available-for-sale investments in the above schedule as ofDecember 31, 2011 were all one year or less.

The Company typically invests in highly rated securities with low probabilities of default.The Company’s investment policy specifies minimum investment grade criteria, types ofacceptable investments, concentration limitations and duration guidelines.

All securities having an unrealized loss as of December 31, 2011 have been in a lossposition for less than twelve months.



12 Months EndedProperty, Plant andEquipment Dec. 31, 2011

Property, Plant andEquipment [Abstract]Property, Plant and Equipment

PROPERTY, PLANT AND EQUIPMENT

The following table summarizes property, plant and equipment as of December 31, 2011and 2010:

As of December 31,

2011 2010

Building $ 5,762,935 $ 19,506,814Furniture, fixtures, computer hardware and computer software 339,820 1,151,745Manufacturing machinery and equipment 29,673,297 72,111,366Leasehold improvements 884,709 884,709Net depreciable property, plant and equipment 36,660,761 93,654,634Manufacturing machinery and equipment in progress 236,770 17,054,686

Property, plant and equipment 36,897,531 110,709,320Less: Accumulated depreciation and amortization (7,964,875) (10,706,478)

Net property, plant and equipment $28,932,656 $100,002,842

During the quarter ended June 30, 2011, an impairment charge in the amount ofapproximately $74.5 million was taken against Property, Plant and Equipment. This impairment,combined with a charge of approximately $3.5 million taken against Deposits on manufacturingequipment, resulted in a total write-down of $78.0 million.. See Note 10. "Impairment" and Note12. "Deposits on Manufacturing Equipment."

Depreciation and amortization for the years ended December 31, 2011, 2010 and 2009 was$7,538,212, $6,681,176 and $2,580,044, respectively. Depreciation and amortization expense isrecorded under “Research and development” expense and “Selling, general and administrative”expense in the Statements of Operations.

During the third quarter of 2011, the Company updated its estimates for service lives ofcertain manufacturing tools in order to better match depreciation expense with the periods theseassets are expected to generate revenue. The change in services lives was accounted forprospectively as a change in accounting estimate effective July 1, 2011. The effect of this changeon Net Loss and basic and diluted earnings per share was an increase of $931,117 and $0.02,respectively, for the year ended December 31, 2011. The Company incurred and capitalizedinterest costs related to its building loan as follows during the years ended December 31,2011 and 2010.


2011 2010

Interest cost incurred $ 465,103 $ 479,898Interest cost capitalized (351,632) (479,898)Interest expense, net $ 113,471 $ —



12 Months EndedDerivative FinancialInstruments Dec. 31, 2011

Summary of DerivativeInstruments [Abstract]Derivative FinancialInstruments DERIVATIVE FINANCIAL INSTRUMENTS

In prior years the Company was actively engaged in purchasing manufacturing equipmentinternationally and was exposed to foreign currency risk. In July 2008 and March 2009, theCompany entered into fair value hedges utilizing forward contracts designed to match scheduledcontractual payments to equipment suppliers which are denominated in Euros and Yen.

Although the hedging activity is designed to fix the dollar amount to be expended, the assetpurchased is recorded at the spot rate in effect as of the date of the payment to the supplier. Thedifference between the spot rate and the forward rate has been reported as Realized gain (loss) onforward contracts. From time to time the Company holds foreign currency options to hedgeagainst equipment payments to be remitted in foreign currencies. Derivative financial instrumentsare not used for speculative or trading purposes.

At December 31, 2011, approximately $1.4 million included in Restricted cash was held inEuros. Accounts denominated in foreign currencies are held in the Company’s bank account forfuture payments to equipment suppliers. Changes in exchange rates related to foreign currencieson deposit in the Company’s bank accounts are reflected as Foreign currency transaction gain(loss) in the Statements of Operations.



12 Months EndedCommitments andContingencies Dec. 31, 2011

Commitments andContingencies Disclosure[Abstract]Commitments andContingencies COMMITMENTS & CONTINGENCIES

Lease Agreement: On June 25, 2010, the Company entered into a lease agreement for thefacility in Littleton, Colorado. As of January 2012, the date the lease was extended, futureminimum payments totaling $247,095 are due through December 31, 2012.

The Company is also responsible for payment of pass-through expenses such as propertytaxes, insurance, water and utilities. Rent expense for the years ended December 31, 2011,2010 and 2009 was $265,256, $295,769 and $232,259, respectively.

Litigation: On October 21, 2011, the Company was notified that a complaint claiming$3,048,701 for an investment banking fee (the “Lawsuit”) was filed by Jefferies & Company, Inc.(“Jefferies”) against the Company in New York State Supreme Court in the County of New York.In December 2010, Ascent and Jefferies entered into an engagement agreement (the “FeeAgreement”) pursuant to which Jefferies was hired to act as the Company's financial advisor inrelation to certain potential transactions.

Ascent has paid Jefferies the fees it believes are owed under the Fee Agreement, which are a$100,000 retainer and approximately $49,000 of out-of-pocket expenses. Ascent believes that theLawsuit is without merit. The Company intends to vigorously defend the Lawsuit.

This proceeding is subject to the uncertainties inherent in any litigation. It is subject tomany uncertainties and to outcomes that are not predictable with assurance and that may not beknown for an extended period of time. The Company records a liability in its financial statementsfor costs related to claims, including settlements and judgments, where the Company has assessedthat a loss is probable and an amount can be reasonably estimated. It is not possible to predict theoutcome for this legal proceeding. If the Lawsuit is determined adversely to the Company, thecosts associated with this proceeding could have a material adverse effect on the Company'sresults of operations, financial position and/or cash flows of a future period.



Statements of Stockholders'Equity and Comprehensive

Income (Loss) (USD $)Total

CommonStock

[Member]

PreferredStock

[Member]


[Member]

AccumulatedDeficit

[Member]

AccumulatedOther

ComprehensiveIncome

[Member]Balance, value at Oct. 17,2005 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Balance, shares at Oct. 17,2005 0 0

Proceeds from sale of commonstock (11/05 @ $.04 pershare), shares

972,000

Proceeds from sale of commonstock (11/05 @ $.04 pershare), value

38,880 97 38,783

Founders stock 933,120 933,120Stock based compensation 26,004 26,004Components ofcomprehensive lossNet loss (1,207,234) (1,207,234)Balance, value at Dec. 31,2005 (209,230) 97 997,907 (1,207,234)

Balance, shares at Dec. 31,2005 972,000

Transfer of assets at historicalcost (1/06 @ $0.03 per share),shares

1,028,000

Transfer of assets at historicalcost (1/06 @ $0.03 per share),value

31,200 103 31,097

Proceeds from IPO (7/06 @$5.50 per unit), shares 3,000,000

Proceeds from IPO (7/06 @$5.50 per unit), value 16,500,000 300 16,499,700

IPO costs (2,392,071) (2,392,071)Stock issued to bridge loanlenders (7/06 @ $2.75 pershare), shares

290,894

Stock issued to bridge loanlenders (7/06 @ $2.75 pershare), value

800,000 29 799,971

Exercise of stock options,shares 31,200

Exercise of stock options,value 3,120 3 3,117

Stock based compensation 348,943 348,943



Components ofcomprehensive lossNet loss (4,180,912) (4,180,912)Balance, value at Dec. 31,2006 10,901,050 532 16,288,664 (5,388,146)

Balance, shares at Dec. 31,2006 5,322,094



Conversion of Class A publicwarrants at $6.60 per share,shares

3,098,382

Conversion of Class A publicwarrants at $6.60 per share,value

20,449,321 310 20,449,011

Redemption of Class A publicwarrants at $0.25 per share (48,128) (48,128)

Conversion of Class B publicwarrants at $11.00, shares 11,000

Conversion of Class B publicwarrants at $11.00, value 121,000 1 120,999

Stock based compensation 1,734,879 1,734,879Proceeds from privateplacement:Common stock, shares 2,534,462Common stock, value 15,962,257 254 15,962,003Class B public warrants 3,754,468 3,754,468Private placement costs (75,807) (75,807)Exercise of representative'swarrants, shares 300,000

Exercise of representative'swarrants, value 1,980,000 30 1,979,970

Components ofcomprehensive lossNet loss (6,503,419) (6,503,419)Balance, value at Dec. 31,2007 48,622,055 1,144 60,512,476 (11,891,565)






Issuance of Restricted Stock,shares 69,846

Issuance of Restricted Stock,value 7 (7)

Conversion of Class B publicwarrants at $11.00, shares 98,800

Conversion of Class B publicwarrants at $11.00, value 1,086,800 10 1,086,790

Stock based compensation 1,881,399 1,881,399Proceeds from privateplacement:Common stock, shares 4,763,698Common stock, value 36,647,693 476 36,647,217Class B public warrants 6,681,884 6,681,884Exercise of representative'swarrants, shares 75,000

Exercise of representative'swarrants, value 495,000 8 494,992

Proceeds from shareholderunder Section 16(b) 148,109 148,109

Proceeds from secondarypublic offering, shares 4,370,000

Proceeds from secondarypublic offering, value 61,180,000 437 61,179,563

Costs of secondary publicoffering (4,361,358) (4,361,358)

Components ofcomprehensive lossUnrealized gain/loss oninvestments 331,068 331,068

Net loss (13,215,076) (13,215,076)Total comprehensive loss (12,884,008)Balance, value at Dec. 31,2008 139,618,107 2,095 164,391,585 (25,106,641) 331,068






Stock based compensation 2,676,957 2,676,957



Proceeds from privateplacement:Common stock, shares 769,230Common stock, value 4,999,995 77 4,999,918Proceeds from shareholderunder Section 16(b) 0

Proceeds From PublicOffering Shares 4,615,385

Proceeds From PublicOffering Value 30,000,003 461 29,999,542

Costs of Public Offering (2,062,866) (2,062,866)Components ofcomprehensive lossUnrealized gain/loss oninvestments (334,080) (334,080)

Net loss (20,922,717) (20,922,717)Total comprehensive loss (21,256,797)Balance, value at Dec. 31,2009 154,315,015 2,658 200,344,727 (46,029,358) (3,012)






Stock based compensation 2,713,468 2,713,468Proceeds from privateplacement:Proceeds from shareholderunder Section 16(b) 0

Proceeds From PublicOffering Shares 5,250,000

Proceeds From PublicOffering Value 21,787,500 525 21,786,975

Costs of Public Offering (1,409,937) (1,409,937)Components ofcomprehensive lossUnrealized gain/loss oninvestments 2,786 2,786

Net loss (31,233,718) (31,233,718)Total comprehensive loss (31,230,932)



Balance, value at Dec. 31,2010 146,566,115 3,226 223,826,191 (77,263,076) (226)






Issuance Of Commons StockTo Service Provider Shares 45,000

Issuance Of Common StockTo Service Provider, Value 58,950 5 58,945

Stock based compensation 1,572,607 1,572,607Proceeds from privateplacement:Common stock, shares 6,400,000Proceeds from privateoffering, value 7,360,000 640 7,359,360

Private placement costs (123,973) (123,973)Stock Issued During PeriodShares At-the-Market Offering 386,050

Proceeds from At-the-MarketOffering, value 305,784 39 305,745

Proceeds from shareholderunder Section 16(b) 0

Components ofcomprehensive lossUnrealized gain/loss oninvestments 1,245 1,245

Net loss (105,743,860) (105,743,860)Total comprehensive loss (105,742,615)Balance, value at Dec. 31,2011 $ 50,002,568 $ 3,935 $

233,004,550$(183,006,936) $ 1,019




12 Months EndedSummary of SignificantAccounting Policies Dec. 31, 2011

Accounting Policies[Abstract]Summary of SignificantAccounting Policies SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents: The Company classifies all highly liquid debt securities purchased withan original maturity of three months or less to be cash equivalents. The Company maintains cashbalances which may exceed federally insured limits. The Company does not believe that thisresults in significant credit risk.

Restricted Cash: The Company classifies all cash or cash items that are legally restricted tousage or withdrawal as restricted cash. If such funds are to be used to acquire non-current assetsor to liquidate long-term liabilities, they shall be classified as long-term in the Balance Sheets.Funds restricted for the payment of interest, current maturities of debt or other current liabilitiesshall be classified as current.

Investments: The Company has classified its investments as “available-for-sale.” Suchinvestments are carried at fair value, based on quoted market prices with the unrealized holdinggains and losses reported as “Accumulated other comprehensive income (loss)” in thestockholders’ equity section of the Balance Sheets. Realized gains and losses on sales ofsecurities are computed using the specific identification method. The Company evaluates declinesin market value for potential impairment. If the decline results in a value below cost and isdetermined to be other than temporary, the investment is written down to its impaired value and anew cost basis is established.

Fair Value Estimates: The fair value of an asset or liability is the amount at which it couldbe exchanged or settled in a current transaction between willing parties. The Company hasrecorded investments at fair value and has classified them as Level 1, 2 or 3 within the fair valuehierarchy. Fair values determined by Level 1 inputs utilize quoted prices in active markets foridentical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that areobservable such as quoted prices and other inputs that can be corroborated by observable marketdata. Fair values determined by Level 3 inputs utilize unobservable data points for the asset orliability.

In addition to the items measured at fair value on a recurring basis, in conjunction with thesignificant impairment loss taken in 2011, the Company also measured certain property, plant andequipment at fair value on a nonrecurring basis. These fair value measurements rely primarily onCompany-specific inputs and the Company’s assumptions about the use of the assets, asobservable inputs are not available. Accordingly, the Company determined that these fair valuemeasurements reside primarily within Level 3 of the fair value hierarchy. The carrying value forcash and cash equivalents, restricted cash, accounts receivable, accounts payable, accruedproperty plant, and equipment, accrued expenses and other assets and liabilities approximate theirfair values due to their short maturities.

Foreign Currencies: Bank account balances held in foreign currencies are translated toU.S. dollars utilizing the period end exchange rate. Gains or losses incurred in connection withthe Company’s accounts held in foreign currency are recorded within foreign currency transactiongain (loss) in “Other Income/(Expense)” on the Statements of Operations.

Revenue Recognition: Revenue from governmental research and development contracts isgenerated under terms that are cost plus fee or firm fixed price. Revenue from cost plus feecontracts is recognized as costs are incurred on the basis of direct costs plus allowable indirectcosts and an allocable portion of the fixed fee. Revenue from firm fixed price contracts isrecognized under the percentage-of-completion method of accounting, with costs and estimatedprofits included in contract revenue as work is performed. If actual and estimated costs tocomplete a contract indicate a loss, provision is made currently for the loss anticipated on the



contract. Revenue from commercial sales of flexible PV modules is recognized as modules aredelivered and title has transferred to the customer. Product revenue through December 31, 2011 isincluded in research and development revenue as the Company is in the development stage andsuch revenues (totaling $538,005 for the year ended December 31, 2011) were generated from alimited number of customers as the product is being brought to market.

Shipping and Handling Costs: The Company classifies shipping and handling costs forsolar modules shipped to our customers as a component of “Research and development costs” onthe Company’s Statements of Operations. Customer payments of shipping and handling costs arerecorded as a component of “Revenues.”

Deferred Contract Revenue: Deferred contract revenue is generated from governmentalresearch and development contracts. The amount deferred represents billings in excess of costsincurred on firm fixed price deliverables. As of December 31, 2011 and 2010, deferred contractrevenue was $0 and $250,705, respectively. Amounts classified in deferred contract revenue areexpected to be recognized within one year of the Balance Sheet date.

Receivables and Allowance for Doubtful Accounts: Trade accounts receivable arerecorded at the invoiced amount as the result of transactions with customers. The Companymaintains allowances for doubtful accounts for estimated losses resulting from the inability of itscustomers to make required payments. The Company estimates the collectability of accountsreceivable using analysis of historical bad debts, customer credit-worthiness and currenteconomic trends. Necessary reserves are established on an account-by-account basis. Accountbalances are written off against the allowance in the period in which the Company determinesthat is it probable that the receivable will not be recovered.

Product Warranties: The Company provides a limited warranty to the original purchaserof products against defective materials and workmanship. The Company also guarantees moduleswill achieve and maintain the stated conversion efficiency rating. Warranty accruals are recordedat the time of sale and are estimated based upon product warranty terms, historical experience andanalysis of peer company product returns. The Company assesses the adequacy of its liabilitiesand makes adjustments as necessary based on known or anticipated warranty claims, or as newinformation becomes available.

Patents: At such time as the Company is awarded patents, patent costs are amortized on astraight-line basis over the legal life on the patents, or over their estimated useful lives, whicheveris shorter. As of December 31, 2011, the Company had $308,785 of net patent costs, of which$103,595 represents costs net of amortization incurred for awarded patents, and the remaining$205,190 represents costs incurred for patent applications to be filed. Amortization expense was$11,062 for the year ended December 31, 2011 and $5,675 the year ended December 31, 2010.

Inventories: All inventories are stated at the lower of cost or market, with cost determinedusing the weighted average method. Elements of cost include raw material acquisition andconversion costs, an allocated portion of indirect production costs, inventory maintenance costsand depreciation and amortization. When plant capacity is significantly underutilized, allocatedcosts included in inventories are based on a normal level of activity, with the excess costs chargedto expense in the period incurred.

Inventory balances are frequently evaluated to ensure that they do not exceed net realizablevalue. The computation for net realizable value takes into account many factors, includingexpected demand, product lifecycle and development plans, module efficiency, quality issues,obsolescence and others. If actual demand and market conditions are less favorable than thoseestimated by management, additional inventory write-downs may be required. The Company’sinventories have a long life cycle and obsolescence is not a significant factor in their valuation.During the year ended December 31, 2011, the Company recognized a lower of cost or marketadjustment on certain raw materials in the amount of $609,179. This expense is included within“Research and development” expense in the Condensed Statements of Operations.

Property, Plant and Equipment: Property, plant and equipment are recorded at theoriginal cost to the Company. Assets are being depreciated over estimated useful lives of three to



forty years using the straight-line method, as presented in the table below, commencing when theasset is placed in service. Leasehold improvements are depreciated over the shorter of theremainder of the lease term or the life of the improvements. Upon retirement or disposal, the costof the asset disposed of and the related accumulated depreciation are removed from the accountsand any gain or loss is reflected in income. Expenditures for repairs and maintenance areexpensed as incurred.



Interest Capitalization: The Company capitalizes interest cost as part of the historical costof acquiring or constructing certain assets during the period of time required to get the asset readyfor its intended use. The Company capitalizes interest to the extent that expenditures to acquire orconstruct an asset have occurred and interest cost has been incurred.

Long-lived Assets: The Company analyzes its long-lived assets (property, plant andequipment) and definitive-lived intangible assets (patents) for impairment, both individually andas a group, whenever events or changes in circumstances indicate that the carrying amount of theassets may not be recoverable. Events that might cause impairment would include significantcurrent period operating or cash flow losses associated with the use of a long-lived asset or groupof assets combined with a history of such losses, significant changes in the manner of use ofassets and significant negative industry or economic trends. During 2011 and 2010, the Companyincurred significant impairments of its manufacturing facilities and equipment in the amounts of$78.0 million and $1.8 million, respectively, based on estimates prepared by management, as wellas a valuation analysis by an independent firm.

Net Loss per Common Share: Basic earnings per share include no dilution and arecomputed by dividing income available to common stockholders by the weighted-averagenumber of shares outstanding during the period. Diluted earnings per share reflect the potential ofsecurities that could share in the earnings of the Company, similar to fully diluted earnings pershare. Common stock equivalents consisting of IPO warrants (representative warrants), and stockoptions and unvested restricted stock outstanding as of December 31, 2011 of approximately1.7 million shares, have been omitted from loss per share because they are anti-dilutive. Net lossper common share was the same for both basic and diluted methods for the periods endedDecember 31, 2011, 2010 and 2009.

Research and Development Costs: Research and development costs are incurred duringthe process of researching and developing new products and enhancing the Company’smanufacturing processes and consist primarily of personnel, materials, supplies and equipmentdepreciation. The Company expenses these costs as incurred, except for certain costs related toinventoried raw materials, work-in-process and finished goods. The Company also incursresearch and development expenses on its federal government research and developmentcontracts, which the Company expenses as incurred.

Income Taxes: Deferred income taxes are provided using the liability method wherebydeferred tax assets are recognized for deductible temporary differences and operating loss and taxcredit carry forwards and deferred tax liabilities are recognized for taxable temporary differences.Temporary differences are the differences between the reported amounts of assets and liabilitiesand their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinionof management, it is more likely than not that some portion or all of the deferred tax assets willnot be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in taxlaws and rates as of the date of enactment. Interest and penalties, if applicable, would be recordedin operations.



The Company has analyzed filing positions in all of the federal and state jurisdictions whereit is required to file income tax returns, as well as all open tax years (2007-2011) in thesejurisdictions. The Company believes that its income tax filing positions and deductions will besustained on audit and does not anticipate any adjustments that will result in a material adverseeffect on the Company’s financial condition, results of operations, or cash flows. Therefore, noreserves for uncertain income tax positions have been recorded.

Share-Based Compensation: The Company measures and recognizes compensationexpense for all share-based payment awards made to employees, officers, directors, andconsultants based on estimated fair values. The company estimates the fair value of share-basedpayment awards on the date of grant using an option-pricing model for option awards. The valueof the portion of the award that is ultimately expected to vest is recognized as expense over therequisite service period in the Company’s Statements of Operations. Share-based compensation isbased on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeituresare estimated at the time of grant and revised, as necessary, in subsequent periods if actualforfeitures differ from those estimates. For purposes of determining estimated fair value of share-based payment awards on the date of grant the Company uses the Black-Scholes option-pricingmodel (“Black-Scholes Model”) for option awards. The Black-Scholes Model requires the inputof highly subjective assumptions. Because the Company’s employee stock options may havecharacteristics significantly different from those of traded options, and because changes in thesubjective input assumptions can materially affect the fair value estimate, in management’sopinion, the existing models may not provide a reliable single measure of the fair value of theCompany’s employee stock options. Management will continue to assess the assumptions andmethodologies used to calculate estimated fair value of share-based compensation. Circumstancesmay change and additional data may become available over time, which result in changes to theseassumptions and methodologies, which could materially impact the Company’s fair valuedetermination. The Company estimates the fair value of its restricted stock awards as its stockprice on the grant date.

The accounting guidance for share-based compensation may be subject to furtherinterpretation and refinement over time. There are significant differences among option valuationmodels, and this may result in a lack of comparability with other companies that use differentmodels, methods and assumptions. If factors change and the Company employs differentassumptions in the accounting for share-based compensation in future periods, or if the Companydecides to use a different valuation model, the compensation expense that the Company recordsin the future may differ significantly from what it has recorded in the current period and couldmaterially affect its loss from operations, net loss and net loss per share.

Comprehensive Income (Loss): The Company’s comprehensive income (loss) consists ofits net income (loss) and changes in unrealized gains or losses on available-for-sale investments,the impact of which has been excluded from net loss. The Company presents its comprehensiveincome (loss) in the Statements of Stockholders’ Equity and Comprehensive Income (Loss). TheCompany’s accumulated other comprehensive income (loss) is presented as a component ofequity in the Balance Sheets and consists of the cumulative amount of unrealized gains or losseson available-for-sale investments that have been incurred since the inception of the Company’sbusiness.

Reclassifications: Certain reclassifications have been made to the 2009 and 2010 financialinformation to conform to the 2011 presentation. Such reclassifications had no effect on net lossesfor those periods.

Use of Estimates: The preparation of financial statements in conformity with U.S.generally accepted accounting principles ("GAAP") requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates.

During the third quarter of 2011, the Company updated its estimates for service lives ofcertain manufacturing tools in order to better match depreciation expense with the periods these



assets are expected to generate revenue. The change in services lives was accounted forprospectively as a change in accounting estimate effective July 1, 2011. The effect of this changeon Net Loss and basic and diluted earnings per share was an increase of $931,117 and $0.02,respectively, for the year ended December 31, 2011.

Recent Accounting Pronouncements: In May 2011, the FASB issued ASU 2011-04, FairValue Measurement Topic (Topic 820): Amendments to Achieve Common Fair ValueMeasurement and Disclosure Requirements in U.S. GAAP and IFRS. This Accounting StandardsUpdate ("ASU") provides a consistent definition of fair value and sets forth commonrequirements for measurement of and disclosure about fair value in accordance with U.S. GAAPand International Financial Reporting Standards (“IFRS”). ASU 2011-04 amends existing fairvalue measurement and disclosure requirements including application of highest and best use andvaluation premise concepts, measuring the fair value of an instrument classified in a reportingentity’s shareholders’ equity, measuring the fair value of financial instruments that are valuedwithin a portfolio and disclosures in measurement categorized within Level 3 of the fair valuehierarchy. This ASU is effective on a prospective basis during interim and annual periodsbeginning after December 15, 2011 and early application is not permitted. The Company does notexpect the adoption of ASU 2011-04 will have a material impact on the Company’s financialposition, results of operations or cash flows.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220):Presentation of Comprehensive Income. This ASU seeks to improve comparability, consistencyand transparency of financial reporting with respect to comprehensive income by eliminating theoption to present components of other comprehensive income as part of the statement of changesin stockholders’ equity, among other amendments. The amendments of this ASU require all non-owner changes in stockholders’ equity be presented either in a single continuous statement ofcomprehensive income or two separate but consecutive statements. This ASU is effective forfiscal years and interim periods beginning after December 15, 2011 and early adoption ispermitted. The adoption of ASU 2011-05 will affect only financial statement presentation andwill not impact the Company’s financial position, results of operations or cash flows.



12 Months EndedRetirement Plan Dec. 31, 2011Pension And PostretirementBenefits [Abstract]Retirement Plan

RETIREMENT PLAN

On July 1, 2006, the Company adopted a qualified 401(k) plan which provides retirementbenefits for all of its eligible employees. Under the plan, employees become eligible to participateat the first entry date, provided that they are at least 21 years of age. The participants may electthrough salary reduction to contribute up to ceilings established in the Internal Revenue Code.The Company will match 100% of the first six percent of employee contributions. In addition, theCompany may make discretionary contributions to the Plan as determined by the Board ofDirectors. Employees are immediately vested in all salary reduction contributions. Rights tobenefits provided by the Company’s discretionary and matching contributions vest 100% after thefirst year of service for all employees hired before January 1, 2010. For employees hired afterDecember 31, 2009, matching contributions vest over a three-year period, one-third per year.Payments for 401(k) matching totaled $257,823, $366,006 and $276,315 for the yearsended December 31, 2011, 2010 and 2009 respectively. Payments for 401(k) matching arerecorded under “Research and development" expense and “Selling, general and administrative"expense in the Statements of Operations.



12 Months EndedDebt Dec. 31, 2011Long-term Debt,Unclassified [Abstract]Debt

DEBT

In 2008, the Company acquired a manufacturing and office facility in Thornton, Colorado,for approximately $5.5 million. The purchase was financed by a promissory note, deed of trustand construction loan agreement (the “Construction Loan”) with the Colorado Housing andFinance Authority (“CHFA”), which provided the Company borrowing availability of up to$7.5 million for the building and building improvements. The Construction Loan terms requiredpayments of interest at 6.6% on the outstanding balance. In 2009, the Construction Loan wasconverted to a permanent loan pursuant to a Loan Modification Agreement between the Companyand CHFA (the “Permanent Loan”). The Permanent Loan has an interest rate of 6.6% and theprincipal will be amortized through its term to January 2028. The Company will incur aprepayment penalty if the Permanent Loan is prepaid prior to December 31, 2015. Further,pursuant to certain negative covenants in the Permanent Loan, the Company may not, amongother things, without CHFA’s prior written consent (which by the terms of the deed of trust issubject to a reasonableness requirement): create or incur additional indebtedness (other thanobligations created or incurred in the ordinary course of business); merge or consolidate with anyother entity; or make loans or advances to the Company’s officers, shareholders, directors oremployees.

On January 7, 2010, the Company and ITN entered into an equipment purchase agreementwhereby the Company purchased seven research and development vacuum and depositionchambers for $1,100,000 from ITN. Payments in the amount of $350,000 were remitted to ITN inJanuary 2010 and January 2011. A final payment, without interest, in the amount of $400,000was paid in January 2012.

As of December 31, 2011, future principal payments on long-term debt are due as follows:

2012 $ 648,0592013 264,9352014 282,9602015 302,2102016 322,771Thereafter 5,442,194

$ 7,263,129



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